Anonymous
Anonymous asked in Social ScienceEconomics · 1 month ago

Why do Democrats and people on the left believe more money that people have to spend on the economy is a good thing?

It isn't a good thing, for it leads to demand-pull inflation. That makes everything more expensive. And guess what? Higher inflation means the value of our currency diminishes, which makes trading with foreign nations more expensive and can potentially lead to cost-push inflation. So, am I missing something in their argument or do they just not understand the finer details of how economics really works? 

Update:

Of course there needs to be demand. But you guys don't seem to understand that there's a limit. I'm still trying to understand how people figure the more money to spend, the better.

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  • Anonymous
    1 month ago

    Because they are brainwashed by the liberal media.

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  • 1 month ago

    So we should raise taxes on everyone so they have less to spend?  got it, anonymous troll

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  • 1 month ago

    because they've never heard of the "shopping mall" model that used to be taught in high school economics...

    in short, the model is designed to show the fallacies behind "closed system" and "growth via consumer spending" thinking..

    the model opens with the argument that paying retail workers at or near minimum wage is "exploitation"...especially when you have "wealthy" stores selling $200 sneakers and $3,000 designer dresses...rather than attract new shops with breaks on rent, the current shops should be forced to increase wages to a "livable" level...

    the flaw, of course, is that shopping malls do not survive based on the spending of their workers... mandated wage increases lead to cuts in staff and increased prices... as service levels drop and customers go elsewhere for better prices, business slows.. when the malls suffer, the "livable wage" folks predictably say the 'solution' is to pay workers more ... which predictably results in even more losses..

    in short, the myth of "increased consumer spending" is just that...a myth.... because the pool of "spenders" usually decreases... even if it doesn't, those workers will be paying more for food and their own clothing, and are not suddenly going to be buying enough $200 sneakers and $3,000 dresses to replace the "anchor" store's customers who have gone elsewhere..

    as high-end shops leave, the best-case scenario is for discount shops to move in....but that leads to a system where working-class wages are funded by wholly working class spending...there is no net gain for anyone involved.... the worst-case scenario, of course, is for the mall to close and all those jobs are lost....with those workers moving on to the next mall to demand higher wages due to all their "hardships"...

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  • 1 month ago

    The Democrats want to take people's money. So I'm not sure where you are getting that. Is it minimum wage hikes? The Democrats want to tax it more. Guaranteed. And work overtime, see what happens. You will end up with more money, but not if we have any of these Democrats for a president. Edit: Conservative are not for larger government. The Democrats are for bigger government, with the expectation that government will take care of them.

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  • Anonymous
    1 month ago

    The more intelligent a man is, the less sense economics will make the way it is presented.  That's because it's lies.

    "Cost push inflation" and "demand pull inflation" are concepts that a six-year-old might come up with.

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  • Jack H
    Lv 7
    1 month ago

    Education can cure ignorance, nothing can cure stupidity, there is no help for you I fear...

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  • 1 month ago

    The US is a consumer based economy.

    The more money people spend, the better the economy.

    That is basic supply and demand economics

    And that is why tax cuts to the 99% have a far better effect on the economy because consumers tend to spend all of that on goods and services rather than tax cuts to the 1% who tend to save that extra.

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  • Anonymous
    1 month ago

    You just learned two new macroeconomic phrases and couldn't wait to use them, didn't you?

    But, you're wrong anyway.  Having devalued currency actually promotes trade exports.  That's why China refuses to allow their currency to rise in value... it will end their export monopoly.

    Lolz

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  • 1 month ago

    Sure. Let's encourage all consumers to stop buying goods until--say November.

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  • Anonymous
    1 month ago

    Would you rather people stop spending and put the economy into recession?

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