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Originally Posted by filtherton
Ace, it really seems like you agree with the necessity of demand in the wealth creation process. You're just too stubborn or too mixed up by your own personal definitions of 'wealth' and 'value' to realize it.
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Essentially, ace has tried to distinguish between increases in living standards to, say, making money and putting it in your pocket or the bank.
However, what he has failed to acknowledge is that increased living standards are only realized via consumption of products and services.
To use an example that isn't trivial, let's say a poor village in Africa gets a system of running water that allows for them to begin installing indoor plumbing. This will increase their living standards. However, it will only increase their living standards if they
actually consume it. They must install the plumbing and they must use the water, or there is no increase in living standards.
To use an example more in line to what ace refers to, let's say someone comes up with a jet engine and jetliner design that safely has twice the top speed while consuming only half the fuel as the average jetliner currently in service. The design is licensed to every every aviation manufacturer in the world. Everyone is set to benefit.
Fast-forward: the average jetliner is travelling at twice the speed and consuming half the fuel. "Real" wealth is created, right? Well, yes, but that's only because people are consuming stuff. Manufacturers are consuming licensing agreements. Airline companies are consuming jets. Travellers are consuming air travel. If none of these things happen, there is no wealth creation.
Even going back to the printing press: although Gutenberg went bankrupt, wealth was created because companies invested in the technology and people consumed printed materials. Without this, there would have been no wealth creation.
Sheesh. Can we get back to Germany soon?
---------- Post added at 01:42 PM ---------- Previous post was at 01:38 PM ----------
Quote:
Originally Posted by aceventura3
I don't agree with the notion that demand drives real wealth creation. I am a "supply-sider". The entirety of supply side economics involves more than simply lowering tax rates for "rich" people. Given that and my belief that economic growth comes from real wealth creation my view on the solution to our economic malaise is obvious.
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You don't know what demand is, do you? In your theory of "real wealth creation," what drives it?
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Tax increases in the US, Germany or any where else is not going to stimulate economic growth.
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I'm not sure who's arguing this.