Thursday, 20 February 2014

The One where i Read the Telegraph and say OMG.

And so this being a sort of blog of musings, sometimes, I thought my musings would make a blog. 

So In the Telegraph , the darling minister, the Chancellor of the Exchequer, is summarised, in a paper that generally takes the Govt stand on most things. 

The link I read was this one
 Economic-recovery-is-not-yet-secure-says-George-Osborne (Telegraph) 

And so the musing started: 

So Osborne says Reliant on Consumer spending too much. I stopped laughing.

Because when high MPTC (marginal propensity to consume) demographic has money things FLOW. That my friends is Consumer spending. Osborne is not supporting high MPTC demographic.

For instance high MPTC is usually poorest sector. We know what he thinks of poor and vunerable. CUT THEIR MONEY. (examples in Welfare Reform, Work Programmes etc ) so is he truly mad?

The simplest way to explain MPTC is , and I'll explain. Give me a grand? Id probably spend most of it. Give a Highly Paid CEO a grand, hardly any of it spent.

Consumption drives production, in theory at least, which drives jobs, wages, and a thing called Circular Flow - which is ALL GOOD.

Consumer spending either domestically or in international trade (goods bought by other countries for THEIR consumers) is a key driver. So How can there be doubt that saying reliance on it is wrong - is actually wrong?

So in summary *How* can you EVER be "too reliant" on a key economic driver?

I hope you enjoyed my little foray into thought there.

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