The money has to come from somewhere. If you raise taxes to fund the plan, the people who are taxed are poorer and they'll spend less. If you borrow money to fund the plan, the people who buy the government bonds have less money to spend and that offsets the stimulus. It's like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing—the water in the shallow end doesn't get any deeper.But you do spend time and effort moving a bucket full of water.
There's also other factors. If I told you I was going into debt JUST to consume more stuff, see more movies, eat out more, etc. Would you say that I'm doing my part to improve the economy, or would you tell me I'm ruining my finances because I'll have to pay that interest for years since I'm not using the money improve my productivity. Well, the stimulus package consists of taking on debt in the HOPES that people will consume with the money.
Forcing debt on the tax payers in hopes that they blow it on useless crap? Why won't Keynes just go away?
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