| Killiana1a said: Unemployment benefits, right now, are the best economic stimulus because the unemployed plug that money right back into the economy just to live. I know because I have family on unemployment. As for tax cuts to benefit the "investor class" it can work many ways. These investors could end up plugging the tax cut money into bonds, which yield dividends but do nothing to create jobs, they invest the money into high rate of return overseas companies who create jobs in places like India and Brazil, they invest the money into a mutual fund who spends half of it paying the salaries of their financial advisors who manage the mutual fund, or they use the money to create a new business, hire more employees, create more branches, and on. Another key reason why unemployment was so low during the Bush 2 era was because we had well over half the people who would be unemployed today fighting in 2 wars (Iraq War and the Afghanistan War). Funny how people forget how low the standards were for enlisting during the height of the Iraq and Afghanistan Wars. Unemployment would be in the 6s and 7s if we did not send unemployable folks to fight in Iraq and Afghanistan. |
Except... everyone plugs there money right back into the economy more or less. You pretty much can't take your money OUT of the economy unless you don't use a bank.
It's less effective when the poor do it then the rich, because it has to filter through first.
Before it can really create jobs it has to filter it's way back up to the rich and to companies, who then create jobs or put it in the bank which creates jobs.
Vs just giving it to the rich in the first place, which creates jobs faster.
The whole "bonds(which the government needs people to buy), outsourcing" etc... is meaningless, since the jobs aren't created till those same people get the money anyway.
If your argueing tax cuts for the rich don't work, you are argueing unemployment doesn't work.
Besides though, what Squillium meant about unemployment being the best stimulus was that literally that many people are employed to deal with handing out the benefits. It was a joke.
