What would you rather fight, Inflation or Unemployment? I would fight inflation.

Discussion in 'Economy' started by Big Blue Machin, Jun 26, 2005.

  1. Big Blue Machin
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    Big Blue Machin Member

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    I would choose inflation because it is the smartest way to fight both of them. Inflation causes unemployment. If the inflation rate is high then businesses have to cut their losses and fire people. Lower inflation makes the businesses more confident and they hire more workers.

    Fighting unemployment would cause a deficit. Spending money isn't the answer. Example is the Trudeau era, (I know there was a recession at the time). More spending equals more inflation which causes unemployment.
     
  2. Big Blue Machin
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    No one has a second opinion or a different opinion on this issue?
     
  3. 5stringJeff
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    5stringJeff Senior Member

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    BBM, I agree with you.
     
  4. Big Blue Machin
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    That's it?
     
  5. Markainion
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    BBM you really seem to want an answer to this, so here it goes. In most situations fighting inflation is wiser than fighting unemployment, but in times of deflationary pressures fighting unemployment is the smartest choice.

    Example. Do to the current situation in the global economy, deflationary pressures have been greater than inflationary pressures, that why the Bush administrations spending hundreds of billions of dollars on military and security contracts which creates jobs, have had little to no effect on inflation. In fact inflation has been very tame during Bushes reign despite a massive increase in government spending. This is only possible do to inflationary pressures from Bush’s spending countering deflationary pressures from the global economy, resulting in mild to low inflation that we have had the past few years.
     
  6. Big Blue Machin
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    The problem is that Bush won't cut spending.
     
  7. 5stringJeff
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    5stringJeff Senior Member

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    Unfortunately, he hasn't in the first few years. The FY06 proposed budget freezes spending levels for most domestic programs, and only increases the military budget (since we're fighting a war and all).
     
  8. Big Blue Machin
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    He's doing what Ronald Reagan did, freeze or cut spending on social services, ctting taxes, and spending everything on the military and defense.
     
  9. Markainion
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    Markainion Member

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    Personally I think it is smarter for a government to spend money on security and military services and research than welfare checks, they both stimulate the economy but one results in advances in technology and helps defend the country.

    If you want to help the poor the government will be better of focusing on education, immigration policies and trade imbalances. Spending money for equality with out changes the factors that create inequalities result in just a waste of money.
     
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  10. Big Blue Machin
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    I wasn't implying anything. I was just saying the truth.
     

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