Government “stimulus” explained
Here’s a quick explanation of how government “stimulus” works.
You take money from those who have it via taxation, inflation, or borrowing. Generally, those who have money are those who know the difference between productive and unproductive labor, and the difference between a good and a poor investment. Otherwise, they would not have money that you could get via taxes, inflation, and borrowing. Then, you put it in the Treasury for a few months while Congress argues how it should be allocated, and then you keep it in limbo for a few more months while the bureaucrats write out the grants, and then it will enter the hands of favored companies that aren’t doing very well.
You know, the guys who don’t know the difference between productive and unproductive labor and investments.
So the next effect? More or less, you’ve taken the capital that the productive need to produce the next wave of jobs, and you’ve put that capital in the hands of those who aren’t productive--inducing job seekers to actively seek unproductive work, and in the process holding billions of dollars in economic limbo for months.
Keynesian economists wonder why consumer demand didn’t pick up until 1945, when the restrictions of the Depression largely faded away. Perhaps someone skilled in basic accountancy could help them out by diagramming the flow of money in any government “stimulus” package.
You take money from those who have it via taxation, inflation, or borrowing. Generally, those who have money are those who know the difference between productive and unproductive labor, and the difference between a good and a poor investment. Otherwise, they would not have money that you could get via taxes, inflation, and borrowing. Then, you put it in the Treasury for a few months while Congress argues how it should be allocated, and then you keep it in limbo for a few more months while the bureaucrats write out the grants, and then it will enter the hands of favored companies that aren’t doing very well.
You know, the guys who don’t know the difference between productive and unproductive labor and investments.
So the next effect? More or less, you’ve taken the capital that the productive need to produce the next wave of jobs, and you’ve put that capital in the hands of those who aren’t productive--inducing job seekers to actively seek unproductive work, and in the process holding billions of dollars in economic limbo for months.
Keynesian economists wonder why consumer demand didn’t pick up until 1945, when the restrictions of the Depression largely faded away. Perhaps someone skilled in basic accountancy could help them out by diagramming the flow of money in any government “stimulus” package.
