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Adam Smith's Pin Factory

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Adam Smith - Our Founding Father ADAM SMITH VISITS A PIN FACTORY   Adam Smith’s description of a pin factory is on the first page of  The Wealth of Nations .  (Chapter 1 – “Of the Division of Labour”)  Drawings of pin factories of this period show workers using hand tools. Smith says the process can be broken down into 18 distinct steps, including packaging the pins. Smith mentions that pin factory workers were poorly paid, despite their high productivity.    Adam Smith says he visited a pin factory employing 10 men who produced 48,000 pins per day.  If each of the ten workers had done all the steps themselves, Smith says each worker could produce only 10 or 20 pins per day.  So the pin factory replaces 2,400 to 4,800 pin makers. The increase in labor productivity (output per person per day) is as high as 50 times that of individual pin makers.     This reduction in unit cost or average cost (AC) and the huge i...
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Government Finance 101. Fiscal Policy: Welcome to Alice in Wonderland

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Secretary of the Treasury PRELIMINARY SUMMARY OF FISCAL YEAR 2025 BUDGET   The Congressional Budget Office (CBO) made their latest projection in January, 2025. The projected deficit in fiscal year 2025 will be around $1.8 trillion, the difference between about $5.2 trillion in revenue and $7.0 trillion in expenses. Interest on the national debt this year will be around $950 billion, over twice the interest expense in the fiscal year 2021 budget. By 2035, the CBO expects the  yearly  budget deficit to increase to $2.7 trillion.   Interest expense this year passed budgeted outlays for the military. It is about equal to Medicare, and also to total non-defense discretionary spending.   Leaving aside Social Security and Medicare, interest expense is about 20% of total budget outlays. Interest expense is about half the budget deficit.   The $1.8 trillion budget deficit is 6-7% of total GDP, or approximately 10% of consumer spending. Adding the $1 trillion trad...
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Trump's World: A Little Bit of Gentle Satire

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I HEARD THE NEWS TODAY U.S. MARINES INVADE CALIFORNIA U.S marines in battle-dress storm ashore, securing the beaches of Santa Monica. They fight their way thru sunbathers, skateboarders, volleyball players, and joggers. Some marines are surprised on how poorly clothed the natives are. Deployed to defend federal buildings, the marines are faced with angry but unarmed demonstrators from the barrios of Beverly Hills and Brentwood. The Marines are ordered not to protect Tesla showrooms from demonstrators. After completing their mission of protecting U.S. property from the descendants of immigrants, a grateful president promised them liberty passes to Tijuana. Marines with Latino/Chicano names are barred reentry into the United States. President Trump says the 700 marines will make Los Angeles, a city of 3.8 million people, "free, safe and clean." Apparently, the only part of L.A. the marines went to was Disneyland. The marines, their mission accomplished, had to be airlifted out ...
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