Jerry Barnes <[email protected]> wrote: > > In case you missed this in the Times or the Post or on NPR or PBS, > > Study: Obama's Stimulus Cost 595,000 Jobs >
I'm undecided at to Keynes, but here's what 600 years of economics and accounting has proven: C+G-T=0. That is, commercial spending (private and business) plus government spending minus trade must equal zero. The reason this simple equation impresses me is that either everything we know about accounting is totally wrong and the last 600 years didn't happen, or it's true. It's the general relativity of accounting. Here's how I use it: if you forget trying to plug in numbers but instead plug in *trends* you get interesting results. Think of each factor as a balance sheet. Let's try Ireland: * We know commercial spending is WAY down. On a scale from -5 to +5, let's be conservative and give it a -1 (i.e. , the book don't look good). * Government spending. We know Ireland is on massive austerity, so let's give that a -2. * Trade. We know investment in Ireland has slowed significantly, but let's be conservative and say 0. Result: -1 - 2 - 0 != 0. Uh oh. Something has to change. They can import less and export more (a lot!), consumers and/or business can spend (a lot!), or government has to spend. Why is all of this important? Because we know that equation is true. And we know that in tough times private and business spending slows and there's very little change in trade. The only factor a country can really control is G - government spending. Sound familiar? It's the position most western countries are in! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:338115 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
