I'm going to say a commonplace that may be shocking, are requested to sit stunned and idiots: Do not be afraid of you who believe in the primacy of politics over economics, but there is mathematics in the 'economy. As in the physical horror is vacuous and the law by which you do not create anything from nothing to print money in the economy does not create wealth, to the maximum, pace Keynes, anticipates.
The fundamental problem of knowledge in all fields of knowledge, is that the truth is hidden behind complex explanations, and often has good reason are quite unpleasant. The lie is rather handy and disguises himself to be very attractive. Who is to draw the map to help someone find a truth important enough, and therefore very unpleasant and very hidden, it is as if he were speaking a foreign language where those in front do not have the tools to understand. We have many examples of this phenomenon in the past: a farmer in 1600 explains that the earth is a ball that travels around the sun more than 100 thousand miles per hour. Told a thug that the whole thing is connected to the goddess Kali has gone a bit 'too far to the canons of an enlightened civilization.
Well, explain to those who believe that if one is poor, you have to do is take the money to those who serve more than he (we are already here out of my mind, who let them decide how much money to whom?) And it gives them the poor. Simple, no? What's complicated in the economy, understand who has the IQ of a dead snail. Or, even easier, the state prints a bit 'of money and gives to the poor, so there is not even disturb the so-called earlier on the basis of subjective parameters rich. We make a law that if one is poor handouts of money, that's solved the problem of poverty
How do you explain that there's things like inflation, the devaluation, balance of payments and the business to what it tells you that there is no justice if we print money to give to the poor, if we do not take a bit 'of money to those evil rich bastards? As long as one has to tell you who goes around shooting nonsense for fun not feel the need to explain anything, we laugh over and send him to hell. However, when many are those who claim absurd and questions many theorems all go to vote, then the matter assumes a different importance.
imagine to be gods. We create a world and populate it with 100 inhabitants divided equally into two states. A service in the State X is financed by taxes in the state B is not. Forget a lot of arguments as the change in demand in the face of a zero price, the phenomenon of equal rights in the service of two X identical in all respects except that instead of working hard and the other as little as possible. There are a lot of issues related to supply and demand. Forget everything but the monetary aspect: it is enough to bring down one of the reasons of those who believe that the economy is a mere tool in the hands of politics.
We list the series. The State will provide the service to X at a level of quality consistent with the income taxes. More taxes and more take the service X will be appreciated, otherwise the service X will be so poor that the citizens of A, who can afford it, then automatically qualify as rich selfish and demonic?, preferring to pay in the state who receive free B to A. The moment you go to pay in State B, will try not to pay more taxes for a service X in A that sucks. Conversely, if the service A is more than acceptable, or better than that provided pay-B, then B will be the citizens of trying to get in to it for free too.
When you experience the two cases? Let. In A supply of X is fixed, independent of the application. The service is provided to all 50 residents of A or one of them, the community will cost, say, 10 gold coins. In State B instead of the service will have a price that varies, which complicates things. The cost of 10 coins will be covered by receipts, which means that there will exist an optimal price by which all citizens who need the service can receive X and the sum of the revenue will be just 10 gold coins. Then there will be a price too high and will prevent some citizens to receive the service, which will prevent a too low to cover the total cost of 10 coins.
Already at this point, many of the Thug goddess Politics are back to dance around the fire and to rotate the curved daggers. We leave the State B with its problems of pricing, depreciation, financing, the management and organization of personnel, research, all that boring stuff and no policy that a company must do to remain competitive and do not declare bankruptcy. Let's focus on the rule A, where recent elections have boosted the power of the Thug goddess Policy. The government program of Thug provides an enhanced service X because poor people, that is not obscene and filthy rich, who can not go to B to pay for it should be able to obtain a high level of service at home too. Who would not vote for the Thug? They are good people who want fairness, justice, progress and all those beautiful things that speak in street demonstrations.
Very well, to increase the level of service X in State A should raise taxes. Thug I have promised that they would fight tax evasion but in practice there are succeeding because the people rather than paying such high taxes is convenient stop producing high-income and working less, or moves to B, in both cases, the income national set, so the tax revenue, so the level of X. The Thug said they would raise taxes only on those unclean things of the rich but on balance the rich are not so many that stand alone service and high quality X free for all, their bleeding would also over the medium and long term financial resources, however, less than disappointing to put a yoke neck and tie them to the wheel shaft whips as if they were donkeys or oxen.
A Thug So, in a panic because the projections of the vote gives them losing the next elections, come together to to square the circle and one of them is un'ideona: why not print the money we need? In fact do not print directly, but it gives the brand a piece of paper that says I state I am committed to give you back sooner or later tot billion. Apart from these techniques, Thug rejoice, the elections are still open, they will not win the enemies of freedom, justice, equality, and all those beautiful things that the Thug fill their mouths when they go on the newspapers and on television. Well, State A debt accumulates to give a great service free X and the people are happy, says long live the Thug! Meanwhile, the public debt increases, increases.
B happens in the meantime? What happens is that you invest to improve service X optimistic developments in anticipation of future demand. Where they take the money to do this? In B, the brand is beyond question, at least directly, you must first pass by the banks and securities markets: stocks and bonds and mortgages. If X (for those who have not guessed yet, you can consider X as progress and do other considerations) to produce in public debt, B makes private debt. The private debt is not guaranteed by the State, of course, or at least not until the so-called rescue inaction by the State would have so massive and so destructive consequences to be imposed on the transfer of suffering on the budget, which they hate because they consider the Thug of the poor to use money to cover the debts of banks, which are for the embodiment of evil thug. Back to
A. The monetary expansion, is so called in economic policy, because inflation has produced did not support the aggregate demand, nor was it dictated by the requirements arising from the dynamics of the credit. The language becomes more specific, another nice little 'Thug decides that they are all lies and you're losing party who will shortly begin the concert and you smell of grilled food from here. Inflation means wealth burned. It means that the currency depreciates in international markets. It means that those who have debts laughs, who cries savings. The most extreme thug love but do not say inflation, the invisible hand of the state par excellence. Also continue to increase the rates demanded by the market to absorb the debt of the state, and that does not matter as long as the economy pulls, the GDP grows, the population in general and especially those of working age increases, when in fact things are going well there is room for those outside of the head of the Thug. When things go wrong, however, everything changes and the chickens come home to roost, if B is found to make bank bailouts, to face the risk with the default currency is not worth anything and explosion of hyperinflation. (If A is smart as Italy goes to the Germans in Europe and calls that are issued debt securities community.)
The solution for the Thug is to find a natural resource. It happens like that in our world. In countries rich in natural resources: oil and gas major in this century, wood grain metal coal fish at other times. But it can also be human work at ridiculous prices and without warranties or legal protections, in practice if in a world where the worker is paid well and enjoys many rights you have 5 billion people are slaves to offer to produce it yourself, you gives a lot of money as it gives them to those who sell oil. Here, to return to our example, if A takes a lot of money to be a resource for B of A and B does not own, the A Thug there may be a lot of air, can stay in power as he pleases, as long as a free offer good X can even go all around the world to preach their religion and try to convert, or kill, a little 'infidels. It is not difficult, but it is increasingly difficult to drink a bunch of lies that sound sensible and, above all, do not require long and complex explanations.
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