Blog Heap of Links for the day 23 February 2014

[T]he main thing wrong with the way that economics is taught in this country is just about everything. The problem starts with, as was posted here a few weeks ago, a little thing called Say's Law.

The short form of it is that production is what creates wealth, not sales. This wealth is created by making something worth more than the sum of its parts and the labor required to assemble it. When you sell something, you are only doing a transfer of the created wealth for stored wealth (money).

An economy without production does not create wealth, but constantly bleeds wealth as it buys imported products. This is why there cannot be such a thing as a consumer nation. Eventually, if you consume more than you produce, you run out of the money that makes consumption possible.

Or, basically, as common sense would put it... you can only buy what you can't afford until your credit runs out, and you can't spend your way to prosperity.