Tea Parties: Whats really going on?

[Kasz216]

Zizzla_Rachet said:

Kasz216 said:
You know the Herbert Hoover thing really doesn't make any sense.

I mean... we have the FDIC now. So a bank failing doesn't hurt the "little guys" in that regard.

Also during the beggining of the Great Depression their was tons of credit out there... even with banks failing. It's just nobody wanted to borrow. That's why FDR's Kensyian polcies really didn't do anything other then give people "hope". The poor didn't end up spending most of their extra money. They saved it.

Food prices and other stuff were dropping. Currently those prices are inflating due to the global food crisis.

Basically the hope on this plan succeeding is hoping that poor people are a lot stupider with their money then they were during the great depression.

But what good would poor people spending their money do...Make them rely on Goverment help more?

 

It's a multiplier effect. 

The thought is... the poor waste their money.  The companies who get this wasted money invest it to make new jobs... which lets the poor get more jobs... to waste more money... which leads to more jobs.  Then when they're too old to work...  Social security and medicare are there... or something.

There is also the government giving the companies money.  In which the companies invest it and create jobs, the poor get jobs, get money, spend money, which creates more jobs... etc.

Largely which method is better is going to depend on how fiscally responsible the people under you are.

 

If people are wasteful...  the first method is better because companies will know exactly where people will waste their money and can expand properly.

If like in the great depression people are fiscally responsible the second method is better.  Since people that money is all going to be invested. 

Of course  one has to ask if either method really works anymore.

Afterall a lot of the stuff people waste their money on are made in other countries.

How much does it help our economy if the poor spend all this extra money... and the companies who get it spend all their money on factories in China.

That's what i don't understand... and am waiting to see.

Kensyian economics made a lot more sense when globalization wasn't so huge.