| Kasz216 said: 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. |
Extremely valid point. This is why something like a payroll tax cut wouldn't be as effective as an increase in government spending. When the government spends money on something, at least 80-90% of that initial spending will go directly to domestic spending (assuming its not being used for something like waging a war abroad). Now some of that money they spend may turn around and be sent overseas when the people who receive that money the goverment spends (i.e. employees of a construction firm or teachers working for a school) go to Wal-Mart, but that dollar has already been spent once in the economy and has had more of an effect than if you had given that money directly to that person who went to Wal-Mart.
If you just cut payroll taxes, people would go to Wal-Mart and spend that money which would get shipped overseas without as much of a domestic boost. That dollar would ripple through the domestic economy less than in the previous example and have a smaller multiplier effect.
This was why any economic stimulus plan that revolved solely around tax cuts was foolish and less helpful to the economy than a plan that used predominantly spending and tax cuts as a secondary stimulus measure.
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
