Re: Income = Output?

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

The problem of income -- Is it sufficient to buy all output
at a profit that will sustain production in the future ? --
ought to be simple to resolve: the answer is that (a) output
grows faster than income, (b) quality and need are not
perfectly matched to output, and (c) that prices and profits
do fall and jobs are lost and poverty follows UNLESS a
safety net works to prevent it.

Of course, where money is printed and spent into ciculation,
outside the production cycle, income may exceed output and
hyperinflation can threaten to bring back barter.

Yet, as argued below, "some" money must be created outside
the production cycle.  But this matter of creating additional
income may best be looked at from another angle -- the
angle of "what" we produce and why we do it.

Society's bigger problem is to match output to national need.
This is hardly ever discussed. We pretend that if we tax profits,
wages and sales, we can match tax revenues and bond sales to
need. The match that we make is a poor one.

Rather than making and selling "stuff" we should be making
the substance to satisfy national need. The money spent to do
this can add to endogenous spending that buys with income
what is offered as output. These two sources of "money",
on the demand side, will or should always exceed output.

At this point of excess demand, there will always be full
employment and all our economic problems will be recast
as logistical problems to ensure that our systems of supply
do work.

We will have to be on guard to see that producer motivation
is not lowered because poverty and unemployment are gone.

Is is very unlikely that such grotesque tools as poverty and
unemployment will be re-instituted to repair any lost
motivation.  Such models and motivators as sports, hobbies,
curiosity, competition, teamwork, adult toys, and altruism,
etc.,  will be able to keep motivation where it must be to
eventually invent the robots and automation that will do
all the chores-- and leave jobs as the most prized possessions
people can have -- more or less as it is today for countless
people happy at work.

John Gelles