econsalon: To Consume or Not Consume

econsalon: To Consume or Not Consume: "Do you think we should adjust our 'mix' of production to include more capital goods (versus consumption goods)? Why or why not?"

I think adjusting our "mix" of production to include more capital goods could be a risky proposition for two reasons. First, in our present economy, tampering with the nation's production "mix" could turn out to be problematic due to our current unstable economy. Keeping the "mix" as is now until the national economy recovers is the prudent and cautious approach. Tampering with a recovering economy could prove to cause negative effects versus positive ones once signs of recovery are emerging. Second, unless productivity of consumption goods are low or in high demand by the public (or abroad), then production of capital goods should be adjusted. As far as I have seen and experienced, our country is far short of consumer goods of all categories and availability. Adjusting our "mix" should occur in times of poor consumer goods production and availability that would adversely affect a future generation, not just during a bust cycle of predictable economic cycles. Michael Garreaud

response to "the fairest of them all"

I beleive the Big Idea Eight is a fair candidate to the fairest of them all.  The idea that economic booms and busts cannot be avoided but can be moderated is a comforting idea to have.  For any member of society (except for the very wealthy and connected) recession and unemployment is a very scary and disturbing thought, and if in the consiousness of the people (and government) a system exists that can effectively reduce the unavoidable busts cycles and lessen the inescapable harder economic times.  The tools of monetary and fiscal policy have proven to assist during lean times, but have also proven to deteriorate and negatively influence a bust cycle.  Moderating the boom and bust cycles can prove to balance such cycles and ease the pain to people and nations during bust cycles.

Michael Garreaud