Originally posted by lasersailor184
You have the GDP. It's a general measure of the economy and the nation in general. It basically measures how much money is being spent in the economy.
I would like to explain how velocity of currency circluation withing an economy is any sort of indicator of economic growth. The only useful measure of economic growth is the growth of production. The only way to increase in growth of production is by investing in captial. People buying consumer goods does not lead to economic or production growth. The producers of the consumer goods taking profit from the sales and reinvesting in capital (factories, equipment etc.) makes the economy grow.
Currency circulation velocity is just one fact that the GDP takes into account, but it's pointless. GDP does also take into account capital investments and that is really the only measure that we need to look at to determine grow, so we might as well just toss the GDP.
Governmental spending affects the economy too.
Sure does. Anytime the government spends money they are displacing wealth were the market doesn't demand it. What's more it does damage to the sectors of the economy were the money is spent.
Exp.
There is a special interest in housing because there is a housing shortage. The special interest lobbys and the government decides it's going to build some houses and rents them out cheap. Great, they just under cut all the businesses that rely on rental income. Those business now have to lower price because demand is less. Now they are recieving less profits on thier business and can't afford to invest in building new houses, or at the very least thier is less desire to build new houses because not as much wealth can be made off the investment. Net effect, housing shortage gets worse. Not only that, but during the building of the government houses workforce is displaced were their might be actual higher demand.
There are only two ways the government is going to get the wealth to build these house. One is to tax individuals, thus taking away thier wealth that they could spend on investing in actual business that might make them more wealth. The only thing worse than this is when the government borrows money that they have to pay interest on in non-economically viable projects.
Both of these things have to be controlled.
Why don't you say "these things have to be planned", praise Marx and get it over with.

If you do too much, inflation will rise just as fast as the GDP will. And this is bad, because the Physical Amount of dollars being spent into the GDP isn't worth as much anymore, so the entire effect is negated.
Yes, you will push up the debt when you do this. It's a necessary evil when your economy is brinking on a "Great Depression."
Inflation, the boom/bust cycle and the Great Depression are/were caused by government manipulation of currency.
The Fed was created in 1913 to help bail out banks. They offered below market interest rates, currency was expanded, and low currency reserve policies were set for the banks. And what happened? The banks lent like crazy, people invested on margin. And surprise, surprise everything fell appart. Samething happens now with the Fed screwing around with the interest rate. Up, down, boom, bust.
Regardless of what past politics have said, what Bush is doing would earn him an A on an economics test. However, what Kerry says he would do is directly off of the "Do not do in a recession" page of an economics book. He would earn a D on that same test.
Bush = Kerry.
They just spend money on different special interests.
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Originally posted by Thrawn
, backed by gold and silver, and to take away the ability of the Federal Reserve to create "money"
Originally posted by soda72
This would be a "very" bad idea...
Originally posted by Thrawn
Why?
Originally posted by lasersailor184
It's called Economics bud. Study it.
I noticed you didn't touch on fiat currencey versue commodity backed currency. I look forward on your thoughts on that.
PS: For those of you on the right, that call yourselves captialists (that means you Gunslinger and NUKE

), there is no way in hell I can recommend this book enough. It totally changed my world view (much to the chagrin of all my Canuckian socialist friends

).
It is extremely acessable to the layman with no education in economics, like myself. This short book just kicks the hell out of every major socialist fallacy. I think you will be surprised how my economic views you have aren't capitalist at all.
Economics in One Lesson - by HENRY HAZLITT
http://www.amazon.com/exec/obidos/tg/detail/-/0517548232/002-3923488-9253618?v=glance