Importance of economics in CONTEXT
Jordan Carter's latest blog entry displays the need for economics in context. He cites an OECD report rather selectively focussing on one sentence that reads: additional fiscal stimulus above that already planned..would need to be offset by higher interest rates". Then uses this magical sentence to rant against tax cut.. on top of that he is stupid enough to link to the report so all can see how wrong he is...
Other more revealing quotes from the OECD report include:
"Higher interest rates will dampen domestic demand...this will be offset by the income effects of the 'working for families' package"
(i.e. the government's pet social project is causing an increase in demand)
"Demand also continues to be boosted by a vigorous expansion in government consumption"
(Econ101: Higher government demand pushes the aggregate demand curve to the right increasing inflation.. must be offset by interest rate hikes to decrease consumer spending)
Guess it's good Jordan Carter is at least trying to use econ-lingo. Would help if he also learnt a bit of first year economics along the way..
Other more revealing quotes from the OECD report include:
"Higher interest rates will dampen domestic demand...this will be offset by the income effects of the 'working for families' package"
(i.e. the government's pet social project is causing an increase in demand)
"Demand also continues to be boosted by a vigorous expansion in government consumption"
(Econ101: Higher government demand pushes the aggregate demand curve to the right increasing inflation.. must be offset by interest rate hikes to decrease consumer spending)
Guess it's good Jordan Carter is at least trying to use econ-lingo. Would help if he also learnt a bit of first year economics along the way..
posted by Dileepa at 7:02 am
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