How can a dollar taken from me by the government and given to a poor person generate a positive cash flow overall? Has no one taken economics 101 when they get to government that they cannot understand the broken windows policy that Baathist put forward?
Step 1. I earn money.
Step 2. The government makes fallacious claim using whatever economist dujour is will to prostate themselves to the political party in need of economic justification (no worries both parties here in America have them).
Step 3. The government taxes me based on this reason a dollar. I am negative a dollar that I may have spent on something.
Step 4. My dollar is used to pay the administrative and bureaucratic needs of the system, god bless them if they can do it for less than thirty cents (after healthcare, salaries, fringe benefits, building costs, etc.) my dollar is down to $0.70.
Step 4. The money is given to a person in the lower quartile who then spends the $0.70.
After this process, anyone is going to say with a straight face that there is an overall increase of 12% to my dollar that was taken from me?
What if I was going to save my dollars up to start a business, which could really create wealth, instead I have to save up longer to start it.
If the economists were honest with that statistic, they would admit it is not the percent increase but the turn around time to spend the money, or a pull forward to quickly juice the economy.
Examples of the government being spectacularly wrong about telling me why they need to listen to economists:
1. Cash for Clunkers, hurt the poor with a destruction of used cars, pulled forward purchases.
2. Stimulus 2, is shown to have no impact on the economy.
3. Trade Tariffs, supposedly to help protect industries, they just happen to be the industries that are rent seeking. Hurts the poor by increasing prices.
4. Minimum wage: started for racist reasons, still has a disparate racial impact.
> How can a dollar taken from me by the government and given to a poor person generate a positive cash flow overall?
Changes to th velocity of money in different uses. Dollars aren't consumed when spent, they keep circulating.
> Step 4. My dollar is used to pay the administrative and bureaucratic needs of the system, god bless them if they can do it for less than thirty cents (after healthcare, salaries, fringe benefits, building costs, etc.) my dollar is down to $0.70.
No, it's still a dollar, because spending it transfers it to other people, rather than destroying it. And, with government spending, at the first hop essentially all of that $0.30 is still in the domestic economy.
> Step 4. The money is given to a person in the lower quartile who then spends the $0.70.
Also, again, largely in the domestic economy, and in places where it has a higher velocity in the domestic economy than it would if a richer person spent it.
And that's where the gain in total economic activity comes from.
> If the economists were honest with that statistic, they would admit it is not the percent increase but the turn around time to spend the money
That's exactly what economists say produces the return to the economy / increase in economy activity that GP discusses.
This is Econ 101 stuff.
> or a pull forward to quickly juice the economy.
It's not a pull forward. (There are ways you can do that, too, but downward redistribution isn't really one of them.)
You're not going to save it to start a business. You're just going to spend it on rent, products from China and a car loan. Don't pretend your socioeconomic class is better than that.
Step 1. I earn money.
Step 2. The government makes fallacious claim using whatever economist dujour is will to prostate themselves to the political party in need of economic justification (no worries both parties here in America have them).
Step 3. The government taxes me based on this reason a dollar. I am negative a dollar that I may have spent on something.
Step 4. My dollar is used to pay the administrative and bureaucratic needs of the system, god bless them if they can do it for less than thirty cents (after healthcare, salaries, fringe benefits, building costs, etc.) my dollar is down to $0.70.
Step 4. The money is given to a person in the lower quartile who then spends the $0.70.
After this process, anyone is going to say with a straight face that there is an overall increase of 12% to my dollar that was taken from me?
What if I was going to save my dollars up to start a business, which could really create wealth, instead I have to save up longer to start it.
If the economists were honest with that statistic, they would admit it is not the percent increase but the turn around time to spend the money, or a pull forward to quickly juice the economy.
Examples of the government being spectacularly wrong about telling me why they need to listen to economists:
1. Cash for Clunkers, hurt the poor with a destruction of used cars, pulled forward purchases.
2. Stimulus 2, is shown to have no impact on the economy.
3. Trade Tariffs, supposedly to help protect industries, they just happen to be the industries that are rent seeking. Hurts the poor by increasing prices.
4. Minimum wage: started for racist reasons, still has a disparate racial impact.