People usually think recessions are bad. Are they in fact necessary? Akin to naturally occurring small forest fires…those are good otherwise there could be a mega fire.
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Yes in a healthy economy you will see constant growth but it will be marked by times of less growth or even a pull back. While in theory supply and demand graphs have an unlimited curve so that a long as supply goes up price and demand goes down. In reality there is a finite point to all of these items. When demand ships because there is to much supply eventually we stop making it this prices rise when prices rise it becomes more expensive to buy things so people buy less thus inflation.
In a truly laisezz fair economy with no intervention we see long periods of growth followed by long periods of recession. Where we get into problems is utilizing government intervention to slow dollar supply which creates more extremes but cycles.
Yes in a healthy economy you will see constant growth but it will be marked by times of less growth or even a pull back. While in theory supply and demand graphs have an unlimited curve so that a long as supply goes up price and demand goes down. In reality there is a finite point to all of these items. When demand ships because there is to much supply eventually we stop making it this prices rise when prices rise it becomes more expensive to buy things so people buy less thus inflation.
In a truly laisezz fair economy with no intervention we see long periods of growth followed by long periods of recession. Where we get into problems is utilizing government intervention to slow dollar supply which creates more extremes but cycles.
Not exactly.
It’s just that we haven’t figured out a better way to do it than to have regular smallish recessions.
We used to have very large recessions, somewhat irregularly (often more frequently) before the advent of, basically, 1930s modern (aka keynesian) macroeconomics and the use of taxes and spending, and changing interest rates, for the purpose of managing the economy.
Since ww2 the federal reserve has intentionally caused most of our recessions, most of which have been historically pretty small, and it’s been considered a success compared to the alternatives.
The forest fire metaphor isn’t the worst but ultimately recessions are going to kill good businesses just as much if not more than the bad ones. It’s just, again, we don’t have a method to avoid them and have a capitalist market economy with regular growth and free choice with your money.
Not exactly.
It’s just that we haven’t figured out a better way to do it than to have regular smallish recessions.
We used to have very large recessions, somewhat irregularly (often more frequently) before the advent of, basically, 1930s modern (aka keynesian) macroeconomics and the use of taxes and spending, and changing interest rates, for the purpose of managing the economy.
Since ww2 the federal reserve has intentionally caused most of our recessions, most of which have been historically pretty small, and it’s been considered a success compared to the alternatives.
The forest fire metaphor isn’t the worst but ultimately recessions are going to kill good businesses just as much if not more than the bad ones. It’s just, again, we don’t have a method to avoid them and have a capitalist market economy with regular growth and free choice with your money.
Not exactly.
It’s just that we haven’t figured out a better way to do it than to have regular smallish recessions.
We used to have very large recessions, somewhat irregularly (often more frequently) before the advent of, basically, 1930s modern (aka keynesian) macroeconomics and the use of taxes and spending, and changing interest rates, for the purpose of managing the economy.
Since ww2 the federal reserve has intentionally caused most of our recessions, most of which have been historically pretty small, and it’s been considered a success compared to the alternatives.
The forest fire metaphor isn’t the worst but ultimately recessions are going to kill good businesses just as much if not more than the bad ones. It’s just, again, we don’t have a method to avoid them and have a capitalist market economy with regular growth and free choice with your money.
No, they are actually indicative of an extremely “unhealthy” economy, a “healthy” economy looks like a stable line with moderate dips and increases sporadically. A stable, healthy economy is good for all the people living underneath it and does not cause major homeless epidemics, nor does it allow intense government corruption. In an unhealthy and unstable economy like one with a lot of inflation and deflation over time as America has become famous for; leads to a lot of exploitation of the system and a lot of people’s lives to be absolutely destroyed/overturned. Economics really comes down to what effects do you want to have for society, if you want a nice, live-able, generally fair society: A stable economy is where it’s at, if you want a society that is built on mistrust and abuse of power: Instability is how it’s achieved. So, really, its about ethics, and idk about you, but i’m sure the vast majority of people would agree that having good living standards for as many people as possible should be society’s priority, since that was the entire reason we invented societies in the first place…
No, they are actually indicative of an extremely “unhealthy” economy, a “healthy” economy looks like a stable line with moderate dips and increases sporadically. A stable, healthy economy is good for all the people living underneath it and does not cause major homeless epidemics, nor does it allow intense government corruption. In an unhealthy and unstable economy like one with a lot of inflation and deflation over time as America has become famous for; leads to a lot of exploitation of the system and a lot of people’s lives to be absolutely destroyed/overturned. Economics really comes down to what effects do you want to have for society, if you want a nice, live-able, generally fair society: A stable economy is where it’s at, if you want a society that is built on mistrust and abuse of power: Instability is how it’s achieved. So, really, its about ethics, and idk about you, but i’m sure the vast majority of people would agree that having good living standards for as many people as possible should be society’s priority, since that was the entire reason we invented societies in the first place…
No, they are actually indicative of an extremely “unhealthy” economy, a “healthy” economy looks like a stable line with moderate dips and increases sporadically. A stable, healthy economy is good for all the people living underneath it and does not cause major homeless epidemics, nor does it allow intense government corruption. In an unhealthy and unstable economy like one with a lot of inflation and deflation over time as America has become famous for; leads to a lot of exploitation of the system and a lot of people’s lives to be absolutely destroyed/overturned. Economics really comes down to what effects do you want to have for society, if you want a nice, live-able, generally fair society: A stable economy is where it’s at, if you want a society that is built on mistrust and abuse of power: Instability is how it’s achieved. So, really, its about ethics, and idk about you, but i’m sure the vast majority of people would agree that having good living standards for as many people as possible should be society’s priority, since that was the entire reason we invented societies in the first place…
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