Import Manufacturers and Taxes

[Gary Allan]

Originally Posted By: Torino
Originally Posted By: Tempest
Originally Posted By: CivicFan

the economists call it a 'multiplier effect'. As far as I remember, it's a factor of 6. That's why stimulus plans are a useful tool in recessions - every dollar that is borrowed and spent in an economic area generates $6 of economic activity. Basically, you take money out of thin air and end up with an extra $5 minus the interest on the borrowed amount.

That's why fiscal and monetary policies used by governments are a fascinating study and that's why the latest discussion about 'spending cuts' and 'deficit reduction' are inadequate (or stupid if one wants to be blunt).

I suggest you look at the unemployment rate over the last 2 years as a check to see how well that works.

Hint: It doesn't. I also suggest you look at Zimbabwe to see how well money taken out of "thin air" works. Hint: It doesn't. You will find NO example in history where people have spent and printed their way out of debt and to long term prosperity.
So spending cuts and deficit reduction are in fact THE issue for long term stability. Are you intentionally ignoring Europe?? Notice the fires and near daily riots?

I heard some people say that unemployment benefits are the best way to create jobs, and that there is a ~1.6 "multiplier". If this is the case, then everyone should get fired and GDP should jump by 60% every year. It's amazing what people will believe.
Tempest, I think you've 'GOT IT'. John--Las Vegas.



Have they come up with an effective treatment that doesn't kill the host?

 

[JHZR2]

Originally Posted By: Tempest
Originally Posted By: CivicFan

the economists call it a 'multiplier effect'. As far as I remember, it's a factor of 6. That's why stimulus plans are a useful tool in recessions - every dollar that is borrowed and spent in an economic area generates $6 of economic activity. Basically, you take money out of thin air and end up with an extra $5 minus the interest on the borrowed amount.

That's why fiscal and monetary policies used by governments are a fascinating study and that's why the latest discussion about 'spending cuts' and 'deficit reduction' are inadequate (or stupid if one wants to be blunt).

I suggest you look at the unemployment rate over the last 2 years as a check to see how well that works.

Hint: It doesn't. I also suggest you look at Zimbabwe to see how well money taken out of "thin air" works. Hint: It doesn't. You will find NO example in history where people have spent and printed their way out of debt and to long term prosperity.
So spending cuts and deficit reduction are in fact THE issue for long term stability. Are you intentionally ignoring Europe?? Notice the fires and near daily riots?

I heard some people say that unemployment benefits are the best way to create jobs, and that there is a ~1.6 "multiplier". If this is the case, then everyone should get fired and GDP should jump by 60% every year. It's amazing what people will believe.


I attribute much of the non-working part to the wal mart effect. For all the union folks and "pro American" people who go to wal mart and buy Chinese junk...

Theory behind the multiplier effect is fine, reality is this:

Drive using imported oil, in your Mexican-made but domestic branded truck. Go to wal mart and buy mostly Chinese made junk sold by a minimum wage peon. What happened to the multiplier? Wal mart pricing pushes any chance of domestic manufacture out the door, allowing any benefit to only touch the upper echelon, and thus it is just another help nobody situation that gets the same folks richer off the masses' stupidity and desire for a handout.