But, without those people how would the rest of the system function? If nobody is buying the economy won't be growing.
Apply the numbers. According to your theory, if we all buy Jaguars, then the economy grows more. That is confusing cash flow with actual growth. Those who, instead, buy a Toyota create economic growth because their dollar buys more value; says to economic 'powers that be' that we want more productive products. The car need not be replaced so frequently - another factor that creates economic growth.
A previous discussion identified how economies grow verses how they self destruct. We can make more jobs by employing more people in the factory. So we hire more security guards. That increases cash flow (what bean counters confuse as growth). Or we do same factory output with fewer workers every year. Latter results in more jobs in the economy, a wealthier nation, higher standards of living, poverty reduction, etc.
Yes, some still don't get it. By doing the same job with fewer employees every year, then the economy creates more (and more productive) jobs.
Buying more is what bean counters advocate when they "throw money at problems like a grenade". That was a most piercing fact from Ross Perot. Throwing money at something does not solve problems and does not create growth. Worse, throwing money at something only results in economic revenge years later such as inflation, stagflation, lower standards of living, job losses, greater foreign debt, dollar 'downsizing', the selling of America to foreigners, etc.
Solution to growth is not found in 'more junk'. Solution is in getting most value from every dollar. How do you measure value? Well, bean counters assume every dollar is same as value. Therefore bean counters insist that more consumption is always good.
If true, then we could require all homeowners to replace their lawns every other year. According to bean counters, that would create more economic growth.
Sometimes consumption is good; sometimes it is bad. How do we determine which? We use something that cannot be measured on any spread sheet - value. And what creates more value? Innovation. What do bean counters not measure? Innovation. So how do they measure growth? Many confuse cash flow with growth when they cannot even measure or just ignore value.
Those who understand these concepts also immediately grasp what Warren Buffet said so many years ago. The only real tax cut is one that includes spending cuts. Instead we increased spending. That is no different than 'throwing money like a grenade'. We now see the resulting mess created this time in financial institutions that used all that money to enrich themselves with money games - especially sub-prime loans. As these wealthier got richer on money games, the average American has seen his income (adjusted for inflation) diminish every year for the past seven years. But how can this be if cash flow has increased so much in America? Well what have we been buying? More yachts? More Jaguars?
Rather curious that those who have been most critical of this 'growth' are some of America's richest men who are also known for being responsible rather than money greedy. Did you hear them or did you hear the economics promoted by wacko extremists through their mouthpieces (ie Rush Limbaugh)?
