Y is national income, or gross domestic product (GDP) as it’s called. C is what we consume. G is government consumption to provide goods and services. I is investment in the economy. X is exports, and M imports.
What the formula says is that our national income is made up of what we consume via the private sector; plus what we consume that the government produces for us; plus what we invest, plus net exports (which is all X less M means). And that’s it. It’s not really that hard.
Really, no. G is government consumption of goods and services. It is not what it produces for us. Now some of that consumption might well become our consumption. But you must keep the distinction clear. Otherwise you just get the nonsense that government spending more to provide stuff, without actually providing more stuff, makes us richer. Which is idiocy, of course.
So we have a trade surplus! I’m shocked.
This is my favourite quote from the whole thing
That’s not because these people are overpaid now but because they’re trained to do their current jobs. They’re not trained as lorry drivers, sales managers, accountants or whatever other skills we’re supposedly short of. So whatever work they take will be lower paid in most cases.
Says the man who wants to ban advertising, swathes of financial services activity and a raft of other professions he considers ‘undesirable’ – his hypocrisy is as nauseating as his economic understanding is lacking…
I did notice there’s 140,000 followers for him now – given he has blocked 20,000 that’s an awful lot of morons out there….
What if “stuff” includes bonds, which are traded liberally as part of a majority of trades?
What if inflation is a sign of money demand, and government easily supplies more?
What if (contrary to the Richard Murphy position) financial activity is a relatively harmless way of distracting traders, so we should encourage it while paying me an inflation-proofed basic income so I can live as far away from markets as I can?