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Originally Posted by roachboy
so in your imaginary world---which is all you ever talk about----i am not Authentic enough, not enough of a Man of the People---to understand the Wisdom of Milton Freidman.
i think this is close to degree zero of idiotic.
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Let me put it this way, you understanding Friedman economics from me is like you being a John Phillip Sousa man and me explaining Charlie Parker to you. In the context of the language that we share, you will never see nor accept the reason and structure in the genius of Friedman. You always get lost in what is trivial.
---------- Post added at 10:28 PM ---------- Previous post was at 10:24 PM ----------
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Originally Posted by Baraka_Guru
You have to admit, though, that this imaginary world is pretty cool. At the Milton Friedman School for Conjurers of Wealth, wizards of the monetary stripes will act for the benevolence of the universe, magically creating wealth so that one day—one day—none of us will have to work another day, because we'll all be independently wealthy.
I should train to become a wizard, not unlike Harry Potter. I bet you I could conjure me some serious wealth.
*raises wand to the air* "Riddikulus!"
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I still don't understand why you fail to acknowledge some of the most basic concepts in economics. Is it really a fantasy to accept that real economic growth comes from real wealth creation? Is it really a fantasy to want capital allocated in a manner that derives the best returns for a society? Perhaps the fantasy is yours as you seem to always put your faith and trust in a few selected political leaders.
---------- Post added at 10:48 PM ---------- Previous post was at 10:28 PM ----------
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Originally Posted by Mantus
Hey Ace, good post.
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Thank you.
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Ok, so you invest this money and make 10% annual profit. In a year you now have $1000 and $10,000 is infused into the economy.
On the surface it seems like I just gave $10,000 to my country and made money on top of that. It doesn't work like that. In my case only 12% of that money goes towards employees. The rest goes towards other companies and business owners - some of it overseas. Those companies also have employees but they too are not getting 100% of what I pay for my products. So in the end that $10,000 is not going towards social benefits. Very little of it is reaching lower income families, most of it is being re-invested or going towards the business owners. Ever if 50% of that 10k was wasted by an inefficient government the local school, hospital or library would still be better off.
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I think you missed the important connection with leveraged wealth creation. This simplest way for me to see it is to think of a farmer. If a farmer normally produces X, but with $10,000 additional dollars, he produces X+Y we have to look at Y in the context of the $10,000. Y did not exist until the $10,000 was invested. What does Y do? Let's first assume the Farmer earns a good profit on the $10,000 from the sale of Y, just to pick a number if that profit is $5,000 (I know there are implied assumptions, i.e. a demand or need for Y, etc.). That profit might be used for further profitable re-investment meeting market demands. The $5,000 is recirculated in society, assuming re-investment, consumption or even savings in a bank that loans money to others. Society may benefit from more food resources, possibly lowering prices or lessening the need for more costly alternatives. New uses may arise out of more availability of the crop, i.e. think about the history peanut. Etc. Etc. Again, real wealth creation is a real benefit to society. And the question is, what is the best use of the initial $10,000 and who determines that?
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The whole idea that more business = better society is false.
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I agree, but that is not my argument. My argument is in the context of efficiently allocating capital. I agree that in some regards public spending is going to be more efficient or productive than private spending. However in our current circumstance I think we are well beyond government spending the capital they get more efficiently than the private sector would. I do not support any additional taxation of the private sector by government.