How the Current Economy Works – In English
By: Brian C. Beasley, CPWA
Over the past 16 years, I’ve worked with some pretty wonderful clients. Their input has greatly shapednot only my business decisions, but some personal ones too. One of the best pieces of advice I’vereceived has been, “SPEAK ENGLISH!” Without a doubt, our industry and the media have done a prettygood job complicating the economy and markets. Today, many people throw in the towel and say, “I justdon’t understand that stuff.” That might work if you have a truly competent advisor that you can trust.But if you don’t understand the world you live in, you’re bound to make some big mistakes. Hopefullythis will help you make some good decisions moving forward.
An economy is people buying goods and services from one another. That’s it. Don’t forget it. It’s reallythat simple.
Key Concept #1: More people buying more “stuff” results in a bigger economy. Fewer peoplebuying fewer things results in a smaller economy.
The CIA World Factbook estimates that the size of the U.S. economy was about $14.14 Trillion in 2009.So who spends all that money? Let’s keep it pretty simple. The largest piece of the economy hastraditionally been the private sector. The other portion is government spending.Here is the government’s portion of our Gross Domestic Product (GDP) over time.
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