Standing Keynesian GDP on Its Head: Saving Not Consumption as the Main Source of Spending

According to the prevailing Keynesian dogma, consumption is the main form of spending in the economic system, while saving is mere nonspending and thus a “leakage” from the spending stream. This dogma underlies much of government economic policy in the United States, including the so-called economic stimulus package that has just been enacted. In this article, I prove, to the contrary, that consumption is not the main form of spending in the economic system and that the source of most spending is, in fact, saving.

Does Neuroscience Support Austrian Theory?

While the rational-expectations school attempts to explain away market bubbles and the ensuing crashes, the Austrian School, which formerly stood alone in providing a compelling explanation for these market phenomena, now has help from the neuroscience community, writes Doug French. In his book Why Choose This Book? Read Montague takes us inside the brain to understand how we make decisions. Montague is no economist. Neuroscience is his beat.

Simple: Government should completely control supply and demand

The NYT offers a solution to the drug problem in the U.S. but it is out of fantasy land: “The federal government needs to do more to slow the flow of money and guns that finance and arm the cartels in Mexico and Central America. There is little hope of ever defeating the traffickers abroad if the government isn’t doing enough to reduce demand at home.”

Study Guide to Human Action, Chapter XI

CHAPTER XI. VALUATION WITHOUT CALCULATION

CHAPTER SUMMARY

1. The Gradation of the Means

Acting man values means according to the valuation he places on the ends they can achieve. (An apple seed is valued through consideration of the future apples it can produce for consumption.) The totality of means needed for a given end would possess the same value as the end, except for the discount due to the waiting time involved. (The concept of time preference will be discussed in a later chapter.)

Ron Paul Has Already Won

Ron Paul’s bid for the U.S. presidency ranks among the most heroic anyone has ever undertaken. We live in emergency times, with a choice between forms of socialism or fascism. The parties’ leadership have embraced this decrepit old model, despite all evidence of the bankruptcy of statism. Ron alone dared pose a challenge. His bid has also been the most unusual in modern history.

Why We Should Worry about Deflation

In a recent post on Mises.org Doug French argued that we should not worry about deflation. There are some sound theoretical reasons to favor deflation. Since increasing productivity brings prices down deflation is a sign of progress. Furthermore, the common arguments against deflation are not well founded. For example, some say that deflation could cause consumers to hold back on spending, and this could slow down the economy.

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