La Cucaracha by Lalo Alcaraz for November 13, 2011

Both parties have brainwashed Americans into thinking consumer spending creates jobs. But consumer spending comes at the end of the process — it’s private saving that creates jobs by providing the capital entrepreneurs need.

“Tricke Down” just results in a puddle of piss.

Spending doesn’t create jobs, saving creates jobs???Our resident conservatives once again show they have no clue about economics. Consumer savings expand the economy IF they are lent out for new businesses or capital improvements to existing businesses. BUT, business owners only take out loans when they see demand for more goods and services. They are not seeing that demand right now, because everyone is watching their spending a little more carefully.Too much consumer saving is just as bad as too little. At the moment, the savings rate is at a record high. Since you can’t convince consumers to spend more when they are worried about their jobs, (if they have jobs!), the ONLY way to increase immediate demand is for the government to spend.Getting the government to spend well and wisely is no small feat, but even boondoggles have a positive effect by putting money into the economy. The boondoggle builders will spend the money they make…The people who start from the position that government is always useless are not to be trusted any more than the ones who say government is the solution to all our problems.

When George H.W. Bush was running against Ronald Reagan in the Republican Primary of 1980 he called the Trickle down economic theory (favored by Reagan and his followers) “Voo-doo economics”. It was right then and it is right now.