Consumption vs Production


I think that points you have laid out may make sense in a purely theoretical sense. But I don’t think that real economies work strictly according to economic theory.

I have heard of no such “burn products” strategy during the great depression, but I am not an expert on the topic.

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Okay let’s start.

All this debate has started from the retired burden on economy. Your arguments were that the elderly are indeed beneficial to economy since A) they can do some teaching jobs using their experience and B) they consume goods & services, assuming that consumption is always good for economy.

I (and the prior comment by Cliff), from the perspective of supply-side economics, disagreed to the second argument (the consumption one). I brought a comparison between ‘handing out money to the retired to let them spend and buying products to burn them in the desert’ to say that inflating consumption is as unproductive as the latter, with exception of periods of recession when the production inputs are used inefficiently. Nonetheless, it was mentioned that state pension does make sense for both non-economic reasons (social cohesion, etc) and economic ones (maximization of utility). In short - it is inefficient but a happier life doesn’t come from efficiency.

Then you wrote that

  • Burning products are worse than actually consuming them because, unlike humans, the desert doesn’t want more consumption.
  • Therefore, more consumption will create more employment and even more consumption.
  • Burning products will cause deflation.
  • Consuming is better than burning because it creates waste to recycle.

But I see these arguments to be flawed since

  • The amount of burned products are at hands of the governments so if creating artificial consumption is that good, then it will decide to buy & burn even more, creating more demands.
  • Stimulus policies are based on this logic (consumption multiplier) but since you failed to convince that the amount of artificial demands are different in these 2 cases, this doesn’t work as a counter-argument.
  • The government buying products to burn in the desert is the typical process of creating artificial demand. It is one of expansionary fiscal policies, which cause more inflation. So you are either using the term ‘deflation’ incorrectly or making an wrong argument.
  • If creating waste is that good why would the government care to reduce it? Also, the products-burning government can just decide to hire more people to effortfully destroy them and create waste instead of ashes.

Then you are now saying

  • There’s no historical case for burning products and that’s because it’s bad to do so.
  • While, it is easy to see people consuming products, because it’s good to do so.
  • (regarding my answer that there is historical cases for burning products, the Great Depression) Never heard of it.
  • It (supply-side economics perspective) may make sense in theoretical sense but real world doesn’t work like that.

My comments on these are

  • Just go and google “the great depression burn product” or something. You should be able to easily find a lot of materials about AAA(Agricultural Adjustment Administration) and crop destruction. I’m not really demanding you to be an expert. You should also notice that I’ve argued that your idea of boosting consumption is, in terms of creating demand, just the same with buying products to burn in the desert. Attacking the latter to be inefficient won’t undermine my points because it is my point that both of them are inefficient.
  • The comparison was about the government handing out money to create consumption and it directly buying products to burn them, creating artificial demand. Now you have secretly replaced it with just consumption vs destruction. This is just misleading the debate.
  • mentioned enough
  • You may say so and I generally agree that economic theories aren’t perfect. But that’s not something we can debate. Since neither of us are economic experts, we will just keep putting stats from various sources & cases, ending up failing to reach to an end. In short - this is not a good starting point for a debate. “It doesn’t work that way in real life” is not a magic word in a debate. Just imagine how would you feel if I reply to all your posts with “it’s just your thought and real life economy doesn’t work that way” or something. This kinda feels like you trying to change the topic.

Lastly, I have wanted to say that you seem like, whether deliberately or not, not reading other’s posts & comments thoroughly. Just take some time to actually read them instead of trying to comment to all the posts. You have made several ineffective arguments and missed the points of mine, despite this being just a simple 1v1 discussion.

I think you have far more energy to dedicate to this debate than I would like to. And why largely my answers were simplistic, as I currently do not have the patience for a long internet discussion.

I generally disagree with a strictly supply-side argument, and I’m sure I could back up my answers with robust stats if I chose to.

I read all your comments, perhaps not your links, but I read all your comments thoroughly.

This post was created to not crowd the mental health post with our debate. So, its purpose is served.

I wasn’t aware of the AAA, but if you’re saying it’s so, it must be.

My assumption is, that was an isolated case, and infrastructure projects and military keynesianism brought the US out of the great depression.

I’d like to not continue this any further, but I invite others to debate with you. Because you have that acumen.

I was just writing another summary comment to wrap this up and now you say you weren’t serious to the discussion lol

But I think you really shouldn’t just say “I was just making simple answers because I was not interested :P” when you made wrong arguments based on incomplete understanding of what others wrote. If you don’t intend to be engaged in a discussion then you should either make a small argument you are willing to discuss or just leave.

You say that you made a separate thread to keep the unrelated discussion out of a thread but that discussion has been started because you’ve commented to a discussion you didn’t intend to engage.

Well simplistic arguments are usually wrong. And I’d rather leave by telling you than being silent.

As for Cliff’s economics, only he knows what he is. So you should ask him. I think that we would all be more well-informed.

And if I put forward “wrong arguments”, well, I’m sorry. I’m not sure whether they were wrong or not, but I’ll take your word for it.

Tired minds lead to bad answers, perhaps somebody here who supports demand-supply synthesis can debate you better than I could. I hope they do, because you’re up for the challenge.