How Economists Size-up a Pizza

By Newsbyrd Staff-

(June 10, 2012) On cable news programs we often watch two experts making two radically opposing arguments for any given topic.  Where the economy is concerned, we should keep in mind the founding principles –which are not usually given, of these two opposing viewpoints. Those principles are derived from and evenly divided along politic lines.

In simple terms (and I’ve heard this before from TV pundits), Democrats generally view the economy as a single large pizza with a finite number of slices. Republicans also use this analogy but believe that an infinite number of pizzas can be made depending on the health of the economy.

Over the past couple of decades, the idea of infinite pizzas is not being supported by the numbers.

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In the Pizza shown below, 80% of US enjoy only a thin slice, about 1/12th.

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In just over a decade corporate profits have skyrocketed.

 

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While at the same time, lending from banks has flat-lined. Remember the Bank bail-out and the justification made by then President George W. Bush? He stated that saving the banks was essential so they could re-loan the funds, thus allowing the economy to continue to grow.  Have you tried to get a loan lately? 

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Source of Charts (there’s more):

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Posted by at June 10, 2012
Filed in category: Economy, Politics, and tagged with:

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