Written by Jeff Nielson (CLICK FOR ORIGINAL)
Much of what is known as “economic theory” is gibberish. It is propaganda, implanted into the minds of academics for one reason: to preserve the status quo of always favoring the (very) wealthy over all other members of the population. The facets of economic doctrine which are valid, are valid because they do little more than express principles of simple arithmetic and common sense.
 
“Supply and demand” is just simple arithmetic and common sense. If supply exceeds demand (i.e. there is a surplus), the price falls. This depresses supply and stimulates demand, until equilibrium is restored. If demand exceeds supply (i.e. there is a deficit), the price rises. This stimulates supply and depresses demand, until equilibrium is restored.
 
Similarly, the principle of economics known as the Marginal Propensity to Consume, is nothing more than an expression of simple arithmetic and common sense. Put a dollar into the hands of a poor person, and that person will spend the entire dollar, providing maximum stimulus to the economy. That’s not a “theory.” It is an elementary fact.
 
Put a dollar into the hands of a middle class person (the few who remain), and that person will spend most of the dollar, and save a small portion of it. Again, this is not a “theory.” It is an elementary fact.

Read More »