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Originally Posted by piercehawkeye45

Agreed. Both supply (companies investing) and demand (customers spending) are important but I would argue that the supply side is not as widely recognized today so needs to be emphasized more.

I do want to make the point that in response to an increase in demand, companies can increase supply in two ways: hiring more workers or making their current workers more efficient. Historically, technology moved slow enough that increasing productivity wasn't an option but I think we are approaching the threshold where it may be cheaper (in general) for companies to increase supply by simply increasing productivity, not the amount of workers. I think this, along with technology allowing lower skilled workers to replace higher skilled workers (think manager positions), explains much of our current economic "recovery".

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Originally Posted by glatt

Stormie is correct. The myth that the Republicans are pushing this election is that small businesses are the job creators. That's not true. Businesses are reactionary. They get busy and they hire more help. They get busy when the consumers start buying their product or service more. Consumers buy more when they have more money to spend, (or feel like they have more money to spend and are willing to charge it.)

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The most effective way to stimulate the economy is to get consumers to start spending.

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Originally Posted by Stormieweather

You need more customers in order to expand. Businesses don't just expand because they have extra money, they expand because demand is higher for their product/service (and they can't squeeze any more out of their current resources).

And that means more cash is needed in the consumer's pocket. In most cases, small business customers are the middle class. Give the middle class more cash and they will buy more with it which will give small businesses reason to expand.

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Originally Posted by Flint

But we're talking about small businesses--think Hank Hill's boss on King of the Hill. Buck Strickland wants to make more money to spend on gambling and hookers. He can't increase his margin, so to make more he has to get bigger. He has to add customers, he has to increase capacity, and he ends up needing another truck driver to make those extra deliveries.

Let me ask you a question Flint, regarding supply and demand in our economy at this time. Buck Strickland aside for the moment, do you think the current limit on our economic growth is related to--in any way--insufficient supply? Like, there's not enough stuff out there to buy? Empty store shelves, stores that could sell it if only they had it? Not enough propane, anywhere??

I'll tell you what it looks like from here, in my house, and in the economic lives of everyone I know. We're all spending *as fast as we can*. There is plenty of supply, there's plenty of demand, what there isn't is plenty of money. The balance of money has tipped dramatically toward businesses and away from workers, spenders, buyers, customers.