VGChartz Europeans, I need your help.

[Kasz216]

PDF said:

Kasz216 said:

It's pretty simple... because government spending isn't real.

Government spending outside a few very rare cases doesn't actually create any real economic growth.

If you aren't running a deficit, that money that taxes are using to pay someone else, would end up being spent or invested privately, and it'd all go around all the same.

If you are deficit spending, you are pulling ahead economic activity, but in the end, it's been shown time and time again in research that the debt you have to pay is far greater.  Even the studies that people like to pull forth on how much stimulus increases the economy tend to note that the decrease ends up wiping out any gains PLUS some.

The success of the economy is largely based on how people percieve it is doing.  If people think the economy is good they spend money and the economy grows.  If they think it is doing bad the opposite happens.

Whether government spending is "real" or not doesn't matter as much as long as people thinks it matters.  Large amounts of people losing their jobs creates a negative economic environment.

I think you are looking at austerity in a much more long term context.  I am simply talking about during the recession.

Not nearly as much as you think, no.  Belief in the economy is usually strong right before crashes, and public confidence actually often tends to lag behind economic indicators.

The USA has been a good example of both.

Consumer confidence can help the economy run better... but it can't actually improve the economy...

and sometimes too much confidence is a bad thing.

 

Sacrificing a future stronger base market to make a crappier market run smoother doesn't work out.  You just end out dragging out prosperity and making prospeirty shorter.