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Posts Tagged ‘lack of demand; economic nonsense’

Lack of Demand – More Economic Stupidity from the Financial Press

The present economic doldrums (depression) are often blamed on lack of demand.  For instance, I heard a news report that suggested lower interest rates will not help the economy because there is “lack of demand” for loans and it was implied that there was a lack of demand in the economy as a whole.  The idea that there is ever a lack of demand, is economic stupidity.  One of the defining points of economics is that it examines how scarce resources are used to satisfy unlimited wants.  Did people stop wanting new cars, new cell phones, updated kitchens, to go on vacation, etc? – of course not.  What has happened is that government has raised the cost of production through excessive regulation and taxes to the point that people cannot afford these things.



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