Why do businesses take out loans? They use loans to invest thereby creating growth, and they can make profit- even after all loans are paid with interest. Governments do the same. This is basic economics, even liberal or classical economists would agree with the concept of spending money to make money.

Saving money and reducing consumption may be wise for an individual human being to do, but at the corporal/national/global level reducing consumption contracts the economy, slashing growth.

If the economy continues to grow, and it will given enough consumption, growth will vastly outpace inflation. This is a historical fact. For example, 80 years ago a car might have cost something around $600 (roughly), and an average car today might be about $20,000. However, the number of hours the average worker would have to work is far less today than 80 years ago. In a perfect world we wouldn’t have inflation, but if you want to talk about the real world, inflation is a fact of life.

Why do businesses take out loans? They use loans to invest thereby creating growth, and they can make profit- even after all loans are paid with interest. Governments do the same. This is basic economics, even liberal or classical economists would agree with the concept of spending money to make money.

Saving money and reducing consumption may be wise for an individual human being to do, but at the corporal/national/global level reducing consumption contracts the economy, slashing growth.

If the economy continues to grow, and it will given enough consumption, growth will vastly outpace inflation. This is a historical fact. For example, 80 years ago a car might have cost something around $600 (roughly), and an average car today might be about $20,000. However, the number of hours the average worker would have to work is far less today than 80 years ago. In a perfect world we wouldn’t have inflation, but if you want to talk about the real world, inflation is a fact of life.

You are completely incorrect about patterns of economic growth. You cannot spend your way into prosperity. Saving must take place in order for capital to be built up over time. And to do so, one must reduce consumption. The balance of spending & saving is maintained via the market interest rate — what people expect to receive as a return on their savings being held and invested.

A government that has the ability to manipulate the currency would OF COURSE prefer to create an inflationary economy so that they can reap the first benefits of newly created money before price increases take place. It is, as Ron Paul said, the great “hidden tax” upon the people.

I think you need to read some Mises, Rothbard, and Hayek to understand how an economy grows and why it crashes. For that matter, just go listen to Ron Paul or Peter Schiff for a while.

You are completely incorrect about patterns of economic growth. You cannot spend your way into prosperity. Saving must take place in order for capital to be built up over time. And to do so, one must reduce consumption. The balance of spending & saving is maintained via the market interest rate — what people expect to receive as a return on their savings being held and invested.

A government that has the ability to manipulate the currency would OF COURSE prefer to create an inflationary economy so that they can reap the first benefits of newly created money before price increases take place. It is, as Ron Paul said, the great “hidden tax” upon the people.

I think you need to read some Mises, Rothbard, and Hayek to understand how an economy grows and why it crashes. For that matter, just go listen to Ron Paul or Peter Schiff for a while.

This is a complete non sequitor. Taxes have nothing to do with socialism.

“individuals reduce consumption in favor of saving, and the economy can resume a sustainable growth pattern.”

This is wrong, when people save more growth shrinks, or the economy contracts. It might be a good thing for an individual to save, but when everyone does it, its bad for the economic system as a whole.

I don’t know what your point was about government policy favoring inflation. Was the point that it stimulates economic activity (and therefore creates more tax revenue)? How do you see this as a bad thing, and why should anyone be a alarmed if the government isn’t agnostic on the issue of inflation/deflation? Inflation/deflation has an enormous affect on the economy, so I would be alarmed by a state that didn’t do anything to affect it.

This is a complete non sequitor. Taxes have nothing to do with socialism.

“individuals reduce consumption in favor of saving, and the economy can resume a sustainable growth pattern.”

This is wrong, when people save more growth shrinks, or the economy contracts. It might be a good thing for an individual to save, but when everyone does it, its bad for the economic system as a whole.

I don’t know what your point was about government policy favoring inflation. Was the point that it stimulates economic activity (and therefore creates more tax revenue)? How do you see this as a bad thing, and why should anyone be a alarmed if the government isn’t agnostic on the issue of inflation/deflation? Inflation/deflation has an enormous affect on the economy, so I would be alarmed by a state that didn’t do anything to affect it.