From Here To Economy Analysis
From Here to Economy accomplishes what it sets out to do, explain economics in a clear easy to read manner. The author, Todd Buchholz develops the readers interest and understanding that there are many factors that drive the economy, as well as showing the reader that their lives affect the economy affects and vice versa.
Economies run in cycles from good to bad. Business drives the economy, and profit drives business. When profits are up, business 's hire employees, increase capital spending, and provide pay increases, and benefits packages. However with disappearing profits, businesses have to cut wages, health-care benefits, and are not in a position to hire more employees which effects workers, as they are afraid of losing their jobs, …show more content…
Free, unfettered markets provide incentives - through price and profit - to allow resources to find their most efficient and beneficial use. The market allows people to make decisions as to what type of behavior they will choose. Will they consume, invest, save, or produce? The market will determine the answer. The incentive for a profit is what drives people to produce products for sale. Thus it is the individual, not the government that drives the economy, although the government does try to affect consumer decisions through …show more content…
However, often governments spend more than they take in, and issue bonds to make up for this deficit. These bonds have a down side, they "crowd out" available funds that makes business projects less attractive. Over time, deficits lead to debt which if not used on properly, will become a drag on the economy.
The key to Supply-side economics is the fiscal policy is a low marginal tax rate. A high marginal tax rate is a driving force of individual decision-making, as it erodes the entrepreneurial spirit. It answers the opportunity cost of work vs. leisure, consumption vs. investment, and risk-taking vs. risk avoidance. Supply-side economics also emphasizes a light regulatory burden, and limited government. By reducing the size of government, the "crowding out" effect will shrink, allowing more money to enter the market. The effect is that the new (previously borrowed from the government) capital can help grow the
Economies run in cycles from good to bad. Business drives the economy, and profit drives business. When profits are up, business 's hire employees, increase capital spending, and provide pay increases, and benefits packages. However with disappearing profits, businesses have to cut wages, health-care benefits, and are not in a position to hire more employees which effects workers, as they are afraid of losing their jobs, …show more content…
Free, unfettered markets provide incentives - through price and profit - to allow resources to find their most efficient and beneficial use. The market allows people to make decisions as to what type of behavior they will choose. Will they consume, invest, save, or produce? The market will determine the answer. The incentive for a profit is what drives people to produce products for sale. Thus it is the individual, not the government that drives the economy, although the government does try to affect consumer decisions through …show more content…
However, often governments spend more than they take in, and issue bonds to make up for this deficit. These bonds have a down side, they "crowd out" available funds that makes business projects less attractive. Over time, deficits lead to debt which if not used on properly, will become a drag on the economy.
The key to Supply-side economics is the fiscal policy is a low marginal tax rate. A high marginal tax rate is a driving force of individual decision-making, as it erodes the entrepreneurial spirit. It answers the opportunity cost of work vs. leisure, consumption vs. investment, and risk-taking vs. risk avoidance. Supply-side economics also emphasizes a light regulatory burden, and limited government. By reducing the size of government, the "crowding out" effect will shrink, allowing more money to enter the market. The effect is that the new (previously borrowed from the government) capital can help grow the