Politicians don't get basic economics

Letter to the Editor
Published: 2/9/2008 12:09 AM

Liberals think that when consumption (which is known as the economy) slows, government stimulation is the antidote.

This belief displays obvious ignorance of some of the immutable laws of economics.

Those economic principles remain immutable under any political party and with any form of political organization, from free-market capitalism through all forms of collectivism, including the welfare-state and all versions of socialism, including communism.

Simply put, those laws state that a society simply can't consume what it doesn't earn.

Somebody has to pay for it eventually.

Therefore, one person's consumption must be paid for by another person's work effort and output, or what's called production.

The belief that it can be otherwise, known as Keynesian economics, has failed ever since it has been tried.

The lesson is simple: as government increases taxation, regulation or inflation, production will correspondingly decrease, and, therefore, so will consumption.

Conversely, as government decreases taxation, regulation and inflation, production revives or increases and so does consumption.

So though politicians cannot increase prosperity in society, they sure can kill it.

Adriania Schulz

West Dundee