Repulslican Economics

Aug 22nd, 2011

Proving, for the umpteenth time, that contemporary elected Republicans simply don't understand the college freshman concept of aggregate demand comes this little excerpt from the HuffPo today:

"...many of the same Republicans who are fiercely protective of tax cuts for the wealthy have already said they oppose Obama's plan to extend the payroll tax cut for low income Americans.

"It's always a net positive to let taxpayers keep more of what they earn," Rep. Jeb Hensarling (R-Texas) told the AP, "but not all tax relief is created equal for the purposes of helping to get the economy moving again."

Amazing. I am compelled to give a lesson. For all the "rich" people and their mouthpieces that call the President a "socialist" but fail to grasp even the most childlike fundamentals of consumer society (psst, that's called Capitalism, by the way), here's a primer:

1 - When the rich get tax cuts, they tend not to spend that money.



Instead, they generally accumulate it. They hoard it. It becomes stagnant wealth. 

2 - When the lower income American has more to spend, it results in a rise in short term transactional activity. 



In case I have lost any of the plutocrats in the audience, like Jeb Hensarling, that means that they spend it.

You see, when people who don't have far more than they need are given a larger portion of their own earnings, they put that currency into the economy nearly immediately in the form of necessities acquisition.

3 - This provable phenomena of rapid, small-gain expenditure has a name. It is called consumption.

Though it might amaze all you really important elitists, when all those "little people" are spending more, businesses are forced to accommodate their activity.

Now, boys and girls, how do you suppose that they do so?

4 - They hire more workers.

This means there are more citizens getting paychecks. In turn, this means even more cyclical spending by even more people. That results, miraculously, in even more hiring.


And so on, and so on.

5 - This is the first, most important and the most fundamental building block of the capital goal we all (allegedly) seek...

sustainable and expanding growth.

Here ends the lesson.