State of economic literacy among Americans

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  • CLM Draper, UT
    Aug. 27, 2013 4:03 p.m.

    Kent C. DeForrest: Demand is necessary to stimulate economic growth, but not sufficient to achieve it. We humans always want more--not always more stuff, but certainly more time, more choices, more pleasure, all of which requires more capital. Productivity is required to meet those demands. When more choices, more products (more supply)become available, the demands that people have--and even some they may not have even known they had--are able to be met. And the economy grows. But the economy did not grow due to increased consumption, rather, consumption happened *because the economy grew*.

  • Gildas LOGAN, UT
    Aug. 27, 2013 2:44 p.m.


    You're jesting with me of course. I didn't see it at first. The Federal Reserve assuring price stability!!?? The exact opposite has occurred as anyone knows. How much was a dollar worth in 1913? How much did a new home cost? An automobile?

    Mass production actually greatly lowered the cost of manufactured products until luxuries came within the reach of even the poorest worker. Business boomed.

    The inflation (not stability) of the money supply care of the Reserve still managed, over time, to vastly increase (not stabilize) costs and prices, cheating the working man of the value of his labor, until eventually his wife had to go to work and he had to reduce the size of his family, and buy a home of wafer boards and cheap shingles.

    We stumbled from one crisis to another, one recession to another. We got into endless wars and one part of the world destroyed the wealth of the other part. Our factories became, not the means of production, but the means of destruction.

  • Hutterite American Fork, UT
    Aug. 27, 2013 1:05 p.m.

    We're losing literacy, let alone economic literacy.

  • SEY Sandy, UT
    Aug. 27, 2013 12:55 p.m.

    But Gildas, we can't have prices fall, can we? The Federal Reserve exists to maintain price stability. Won't falling prices put people out of work? Who cares if falling prices makes goods more affordable?? A reduction in demand will throw us into a recession or depression, won't it?

  • Eric Samuelsen Provo, UT
    Aug. 27, 2013 12:41 p.m.

    Actually, what you're describing are 'economic models,' and they're not terribly difficult to understand. And it doesn't take much research to learn which models work, which ones have an accurate predictive track record. 'Trickle-down' economics fails at every level. And we have 80 years positive history with Keynes.

  • Gildas LOGAN, UT
    Aug. 27, 2013 12:26 p.m.

    If you save a part of your income you can then purchase big ticket items for cash, and ultimately have much more disposable income because none is going to credit charges.

    If less people were rushing out to purchase on credit, there would be a commensurate reduction in demand and with it a decrease in prices.

    Who says we live to benefit big corporations and money lenders?

  • ugottabkidn Sandy, UT
    Aug. 27, 2013 11:59 a.m.

    Is not the economic system of choice in our nation capitalism? I think maybe we have an oxymoron here.

  • Kent C. DeForrest Provo, UT
    Aug. 27, 2013 11:44 a.m.


    The problem with your second assertion is that producer goods will not be produced if there is insufficient demand for consumer goods. This has been the problem for the past four years. We have had a lot of investment money lying around, earning virtually nothing (and in some cases, earning negative returns) because there has been a lack of demand. This is the fallacy of supply-side economics. Supply doesn't drive the economy. Demand does.

  • CLM Draper, UT
    Aug. 27, 2013 10:30 a.m.

    Where do you think savings go? Very few people remove their savings dollars from the economy, they invest it in business through stocks and bonds or put it in the bank where the money is used to make loans to businesses, either directly or indirectly. In other words, all savings are spent!

    Further, when people postpone a portion of their consumption and put their discretionary dollars into savings, more resources would be freed up from the production of consumer goods and diverted into making producer goods (such as tools and equipment), which create sustainable growth.

  • Ultra Bob Cottonwood Heights, UT
    Aug. 27, 2013 10:11 a.m.

    When we ride the convenience, we expect the driver, engineer, pilot, or whatever to do what he does without a lot of direction and control by the passengers. We really don’t have to know a lot about the dials, switches, levers and wheels.

    Our government is our driver.

  • Happy Valley Heretic Orem, UT
    Aug. 27, 2013 7:53 a.m.

    ...and yet with all the evidence there are still those touting "trickledown" as a successful model.

  • isrred South Jordan, UT
    Aug. 27, 2013 6:25 a.m.

    "How else to explain such counterintuitive notions like 'spending creates wealth,' or 'saving is a drag on the economy?'"
    This is absolutely NOT counterintuitive. If everyone is saving all their money and nobody is buying goods and services, then all of those people whose jobs relate to providing those goods and services will no longer have jobs because those businesses that employ those workers will be out of business due to not having any customers.

    It's actually basic common sense.

  • Roland Kayser Cottonwood Heights, UT
    Aug. 27, 2013 12:06 a.m.

    Curbing your spending and saving more is excellent advice to any individual. If everyone in society does it at the same time, however, it means that business plummets and the country goes into a severe recession.