Hi Dick. Long time eh?

I don't know nothing about Economy. That's a subject that rises questions more difficult than what i can manage. So, maybe i am going to appair more stupid than how actually am.

In Italy the government tends to higher the taxes, because the budget of the State is in trouble after almost 20 years of government of the Clown Silvio Berlusconi.
In the same time the government is also trying to cut the expenses of the State, for the same reason.
The result is that the normal citizen is paying more for a worse service. The hard task of Mario Monti is now to balance as much as possible the taxes and the expenses. But it is a fact that on average the citizen is getting poorer and poorer.
In my opinion that is not due of taxes, but instead of the recession of Economy in general. In my case, for example, i have the same salary i had 7 years ago, although the money i have to give when i go shopping is more. Though my life stile is worse than 7 years ago.
While few years ago i could threaten the company that if they didn't give me a rise of salary i would find another job, nowadays i cannot do that anymore, because finding another job is more and more difficult (and that not only because i am growing older and older, but mainly for the recession of Economy).

The fact is that if one has more money to spend, he spends more money. Which means that he buys more goods, which means that more goods have to be produced, which means that more people have to work for producing them, which means the companies make more profits and pay more employees, which will be able to spend more money and so on.

BUT:

If somebody has less money, that means that somebody else has the money that he should have had. For example, if my salary is low because the State takes out from it a lot of money through taxes, that means that the State is paying somebody else, for example those ones that provide the services (a bus driver, for example, making the bus service more efficient). That somebody (our bus driver) can spend the money he makes with his salary buying goods that he couldn't buy if he was unemployed because for the cut of the bus service due to reduction of taxes.

In other words, what i want to say is that if i do not make big money, that is an obvious damage for myself, but it is a good thing for somebody else that make money instead of me, which will be part of the distribution of wealth necessary to run the same economy.
In my vision economy goes better when there is more money used to run it, no matter who is the one that spends those money.
At the end of the day if a thief steal 10,000 euros from my saving account, i would be really pissed, but that means that there is somebody that has, in his pockets, 10,000 euros to spend.
I won't be able to buy a new car, because i don't have the necessary 10,000 euros i need. But he would. Therefore that car is sold anyway.
So, if the total amount of money within a state is always the same (the trick to print new money is kind of dumb!), i wonder how Economy can do better or worse.
If i waste money, for example taking out my wallet and throw away its content, somebody else would collect those money, and if he does, he will spend them, and that is a good thing for economy anyway.

So, saving money is a good thing for economy. Spending money is a good thing for economy. For economy it is a good thing also wasting money, giving money away and also stealing money.
So, how comes that Economy is doing bad?

I have a parcial answer on it.
Economy grows when the amount of money within a state grows. Which means when export is doing better than inport.
If a State export a lot of goods, the other State that buys those goods gives it money, which can be used (and will be used) to invest, or to increase economy.

BUT:

If a state get more rich when exporting, being that exportation equals to inportation by another state, the other state gets more poor.
At the end of the day what our Economy needs to do better is to try to do so that other states' economies do worse and worse. Which doesn't look to me very ethical at all.
Moreover, while in the last century our economies were so strong that could impose their right allover the world (infact those BRICS states were actually considered third world), nowadays their economy is strong enough to win the battle. So, even if we exclude any ethical reason, i don't think that our economy could ever do any better anymore.

Mmh..
Dick, i am not thinking here on how to make money myself, and i am not really judging the situation under an ethical point of view.
It's just that when the news speak about economy and finance, nowadays i don't really understand what the hell they are talking about.
I mean. If a government spend money on wars, for example (which is a thing i don't like, but i stay out of ethical reasons now), that doesn't mean that it is wasting money. Maybe it is wasting resources, it is wasting human lives and so on. But it is not wasting wealth. If a state buys... i don't know... military airplanes (which maybe fall during a battle), guns, salaries of soldiers, bombs, military vehicles... in one word all the necessary to fight a war, well in that case there will be someone that produce military planes, guns, bombs, vehicles... that will get those money.
Which means that those guys will be able to buy... mmmh.... say... bread, wine, cheese, peanuts, cars, toothpicks, clothings, shoes... Which, theirselves, are being produced by somebody, which will soon or late get those moneys, and so they will be able to buy what they like to buy and so on.
If we don't consider inport/expor, the money around, and the wealth, within a nation is always constant. This drives good for economy in the sense that the production will be favorite, producing more and better goods for people. Also this is not wonderful for the environment because producing more and more goods means consuming more and more resources. And in this sense what is not good for the environment is not good for economy. In other words, what i believe is that economy cannot do good if we exclude inport/export. And it cannot do bad either, but we are accustomed to a life style in which there is always a growth of economy, so, a static ones is kind of unconfortable to us.

The real problem, in my opinion, is that within a nation, rich people tend to own (political) power. And being that wealth is considered a good thing, they use that power to make more money. Since the total of wealth, for the reasons i tried to explain in the words above, cannot grow, that means that poor people become more poor. Wealth tend to concentrate to few rich people, and the rest of population tend to loose that wealth. In italy we say "la forbice si apre" (="the scissor opens", meaning that the higher blade (rich people) goes up and the lower (poor people) one goes down).
Again this is not ethical, but i am not considering this side of the problem. From the point of view of economy, this looks to me a bad thing, again. Because if i am rich i tend to buy whatever i need, untill i don't need anything at all anymore, and in that moment i tend to stop consuming and keep accumulating wealth. And stopping consuming is not a good thing for economy. On the other end, the rest of the world that is getting poor because of me getting rich, tend to stop consuming either, because they don't have money to spend. Which is a bad thing for economy again.
It looks to me that the best situation for economy is when the scissor is closed. Which has another inconvenient: if a lot of people consume a lot, the production consume a lot of resources, which lead to the need to find a solution to the problem of resources. Although i believe there is no solution for this problem. And that leads again to a bad thing for economy.
I believe the real sustainable future for humanity and for the world is a slow and controled economical decrease, towards a balance where nature is regenerated at maximum the same rate as it is consumed. But i also believe that who is loosing most, in this scenary, is rich people. And that compromise the project, because, as i said, rich people control the power.
In other words, what i believe is that Politics should govern Economy, and not vice-versa as it happens now. And that must be obtained on a global scale.
Which will never happen.

Ah, obviously i didn't mention inport/export because, if we consider the global world economy, there is no inport/export possible (untill we find some little green dudes on Mars)

@tychecat - Dick,
I believe that there is one advantage in a society that use an unequal model of economy (by the way, i believe it wouldn't be an advantage in a model of society based on different values).
If the wealth of the citizens was evenly distributed, everybody would have pretty much similar needs, whichever is the average wealth. And that is not good for the production in general.
For example, if everybody had been able to buy bread, cheese and wine, but not caviar, oysters and champagne (too much expensive!), as a result there would have been the need of an enlargement of production of bread, cheese and wine, but a total cancellation of the market of caviar, oysters and champagne.
If everybody can afford a small Fiat 500 and nothing more than that, there would be a relative enlargement of the sales of the Fiat 500, but the Ferrari company would go bankrupt.
It wouldn't be a big deal if no Ferrari cars would be around anymore, but the employees of Ferrari company would loose their job. And they wouldn't be able to buy a Fiat 500 either.

I said that in a different model of society this would work because what i really believe is that the wealth should be balanced on the real needs of pepole, not on their "wannabes". If everyone just need bread, cheese, wine and a Fiat500, he should work just for the amount of time that allows him to buy bread, cheese, wine and a Fiat500, and not work more and more in the hope one day he would eventually be able to buy caviar, oysters, champagne and a Ferrari. If the goods are consumed by the same people that contributed to produce them, there would be more than enough work for everybody, and the wealth would be spread evenly to everybody, in a measure that everybody would be able to buy whatever they need (i.e. whatever they produce) and nothing more.

I admit that this last model is somehow sad for a human being (maybe because i am too much "imprinted" with capitalism me too?). Though, I also find a sad taste on the actual capitalistic consumeristic model. My life is (and has to be) all devoted to the task of having more and more money to satisfy some needs that are not real but artificially created by the life style in which i must live. With the hope to have one day enough money to make my dream true, which i will never reach (by the way my dream is to buy a small farmhouse in the countryside, and live with what i produce - if you consider that my grandparents, who were just poor agricultural people, owned a farmhouse just like the one i would like, why can't I afford it, being that i am much more rich than them? - isn't it a nonsense?).

About capitalism (and communism) i think your analysis is correct (for what a statement like this pronounced by someone that about economy doesn't understand a big lot would worth).
But i'd like to add a couple of things.

The attraction of capitalism to people is essencially based on the fact that the average wealth upon this system is higher than any other system ever tried. And in most of cases also the wealth of the poorest people is higher than other systems. I think this is the fact that is really attractive of capitalism, ando not, as they commonly say, the fake merit of allowing opportunities open to everybody.

The statement that in capitalism there is higher wealth, on average and also on lower classes (besides the rich dudes) is due to the fact that capitalistic economy is stronger than the non-capitalistic ones. I mean, the goods produced within a capitalistic nation are more competitive than the ones produced into non-capitalistic ones, so that, in a regime of free trade, non-capitalistic countries will import goods, and give wealth to capitalistic ones.
That, of course, is valid only if there are some non-capitalistic nations, and if, among the capitalistic ones, we consider only the ones that use to win the competition.
Of course, if the whole world is whole based on capitalism, competition will make so that winner nation will have higher average wealth than poor nations. I bet that if you ask to lower classes in looser countries, they would answer that capitalism is not that much attractive. Say, try to ask to somebody living in a bidonville in Rio de Janeiro, or to those ones that suffered the bankrupt in Argentina 10 years ago, or the labor employees in Greece. They are all in a capitalism system, but i doubt they are still confident that it is the best system.
Nevertheless, those "looser" countries won't change their economical system just for the fact that they are looser, for two main reasons:
1) rich people in those countries are still rich, and a change will affect firstly their wealth. And those rich furts are also the ones that drive the power of those nations (since those are capitalistic nations). So, such a change would be a suicide of the powerful class. A nonsense.
2) a country is a looser if, despite it is based on capitalism, its economy is not strong enough to compete with other winner countries. If this is the situation, why in the world the looser country should change its model to an even less competitive one?

In my pessimistic vision, westernian countries (europe at first, but follows also USA) will loose the game against the emergent economies (mainly China and India). Upon this scenary, in a relative close future, our wealth will decrease. It is a fact that in our countries, already now, one problem is that the newer generations will be poorer than ours. That nowadays young people are more unemployed than how we were at their age... So, we start to see that capitalism is not that fair and good and efficient as we thought it was (when we were so blind to look only to our little selves). So, what should we do to solve the problem? Turn to communism? I don't know if it is right or not. What i am kind of sure is that it won't solve the problem at all. The funny thing of this consideration is that this vision is pessimistic for us, but very optimistic for them.

In my opition the statement "even opportunity" is a fake value because for these reasons:
1) opportunity doesn't always equate to equality and freedom. In the good old Far West, for example, everybody had the opportunity to kill each other, and that was far from being a good value for society, and even less it was a good value for individuals (living a life where you have to kill in order not to be killed is kind of stressful).
In the same way, if you make a lot of money, using your opportunity to do it, a lot of people will loose those money. If you become rich, they become poor. That's a good thing for you, but not for them, although they had the same opportunity.
2) Despite the equality of opportunity for everybody, only one (or few) of those dudes will win the battle, which thing will subtract the opportunity of the others to win theirselves. So, obviously, equal opportunity stops to be equal when somebody wins the fight, and it stops to be equal before that opportunity rises its effect.
3) the real interest on doing something shouldn't be the much money you make doing it. For example, i am a good software engineer, and i produce good programs. This activity make me feel satisfied when i finish a good program because i am proud of that program, and also because somebody else can use that program efficiently as the program is designed for. Obviously i would like to make a lot of money with that program because for the fact that it is actually a good program, but if i don't, that doesn't subtract value to my work at all. A good meritocratic scale of value would say that i should make more money as better my program is, but what does it mean "better"? In the best case my program is better for the company i work for (which is the one that pays my salary) when it helps to make more money (or to spend less money), which doesn't mean at all that my program is a good product. So, if we define opportunity the attitude to make the most money with the less of effort as our company ask us to do, do we really consider it a good value? In other words, i am interested in the opportunity to make good programs, not to make a lot of money, and i consider a waste of time for somebody like me that is a good software engineer, but a bad economist, to work for perceive the goal of making money instead of writing programs. Making money should be the effect of the good choice of the opportunity of making good programs, not of making good money.

@tychecat - 
Good for you and your wife!
In my case it looks like i won't ever be able to buy my farmhouse, unless i find moneys somewhere (win the lottery, receive money from an unknown heredity...) In Italy, a small farmhouse wouldn't be less than 200thousands euros, to which you should add about the same amount to fix it.
Of those 400 thousands i own about... mmmh.... less than 10%. If i keep all the money of my salary, without spending even one single penny (which is impossible, because i have to eat something, i believe) i will take about another 10 years to own the money enough.
Of course i could start a loan, but in that case i would have to pay the rate of the loan, which means that i should be able to make enough money, which, if i quit my job to become a farmer, means that i already have my farmhouse ready and working all of the sudden, which obviously is not.

Being more realistic, i will never be able to buy a farmhouse. And i also am not that kind of person that run after the capitalistic dream.
When i say that i "have" to spend money in consumeristic goods, i see the nonsense for example in the fact that i have to spend money to put gas in my car, when i use that car to go to work to make money to pay the gas. That's nonsense, to me.