Sunday, March 14, 2010

Politicians Fail the Simple Economics of Prosperity

Economics is actually very simple. Human beings, by their nature, must be free to take action to achieve their goals. We don't have fur, claws and instincts like lower animals. We must apply our minds to goal-directed action to satisfy our needs. Freedom works because it is consistent with our nature -- our requirement to be free to take action to survive and flourish. Political liberty, in turn, is designed to protect that requirement. Un-perverted by false incentives, people will always work and save based on their actual needs and priorities. It's in our nature to do so in the quest for economic security, because we don't want to starve today or tomorrow. The quest for economic security starts with production, not consumption. Consumption is a given. It's automatic. People have limitless desires and will consume if they can consume. Yet one hears constantly that consumption comes first, that we must "stimulate" the economy by inducing people to borrow and spend. Putting consumption first in the equation turns good economics on its head, however. Consumption is the end of the process, not the more

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