With profit unsure let's focus on cost and win

["John Gelles" <johng@xxxxxxxxxx>]

Any ordinary person with no knowledge of economic
theory and literature can tell you that what the world
needs to get back to high growth in output, employ-
ment, and consumption, and improvement in the mini-
mum standard of living,  IS  more spending by persons,
firms and governments with hard money in the bank.

What no one can tell you is whether or not there is
enough hard money to spend to gain the results we
want.  Nor can they tell you  IF  spenders will come
through or if they will stand pat and spend less than
they could if they tried to do what we want.

So, if you are the President anxious to buy national
security and bring back a prosperous economy you
will be told first that you may not have the money to
do either or both.

Assuming you insist that the nation MUST do both,
you may be told to raise taxes, spending and govern-
ment borrowing and to lower interest rates (subject
to central bank control and influence) and the value
of your currency (to raise export profits and taxes
related to it).

The hardest by far of these actions will be to raise
taxes. In a democracy the party that raises taxes
often loses the next election.

Accordingly, you may opt to do all the above things
but raise taxes. You will be told inflation will be your
reward.

At this point you will be compelled to resort to price
control and rationing. Wage control may follow. You
will move the national economy from one constrained
by unmanageable profit to a system focused on cost.

So what are we waiting for?

John Gelles