blue-lady on 05 February 2009
| akuma587 said: Anyone know what the multiplier effect is, or did you sleep through economics? If the government spends money on something, it is more likely that those dollars will be re-spent through the economy. The government has spent them once already and the employees are likely to spend those dollars again. Compare that to just giving people a tax cut. If they decide to save that money or put it towards paying off debt, they have not stimulated the economy much at all. That multiplier is much lower. Tax cuts aren't like voodoo magic or something. They can't solve every problem. Furthermore, a lot of times the money is spent on products that are manufactured by foreign companies (like manufacturing companies in China that make everything you see at places like Wal-Mart), so the money given with a tax cut is even less likely to stimulate the domestic economy. |
And if we all spend our $950 on Japanese PS3's made in China and Taiwan...
