Taking Money out of the Economy…

[kalm]

..aka as cutting spending can actually cost us money in the long run.

Here's three basic examples but there are tons more.

Yes, taking money out of the economy actually takes money out of the economy, and that costs money. Yes, cutting the budget for fixing roads and bridges actually means they start to fall apart, and that costs money. Yes, cutting the food budget for seniors puts them in the hospital and in care facilities, and that costs money. Yes, cutting the health budget has an impact on our health, and that costs lives. Duh.

In the end it doesn’t matter how many slogans about “personal responsibility” and “makers and takers” you use to justify demonizing government spending on things that make all of our lives better (and thereby cutting your taxes). Bridges will still fall down if they are not maintained. And you will still get sick if contagious diseases are not kept in check.

http://ourfuture.org/20141014/budget-cu ... save-money" onclick="window.open(this.href);return false;

[AZGrizFan]

That'd be great if they actually were spending money fixing roads and bridges.

[Pwns]

Of course spending less money that you don't have deprives the economy of money. Who denies that?

If it were about putting more money in the economy then why not move forward with QE4, QE5, 6, 7, 8, and 9 right now?

[GannonFan]

That'd be great if they actually were spending money fixing roads and bridges.

Or doing it cost effectively. Just spending money to spend money has never solved anything. Heck, European govt's are routinely over 50% of GDP in terms of government spending. How are they doing these days as they approach a triple-dip?

[CitadelGrad]

Two questions have to be answered when government spends money. First, what is the economic multiplier? If it is less than one, the spending actually is contractionary. Second, what is the velocity of the capital spent? If the velocity isn't high enough to increase GDP, it is contractionary.

Government spending doesn't necessarily "put money into the economy". There is an enormous amount of empirical evidence over many decades that government spending actually takes money out of the economy, crowds out private investment and is far less efficient than private spending and investment.

[kalm]

That'd be great if they actually were spending money fixing roads and bridges.

Or doing it cost effectively. Just spending money to spend money has never solved anything. Heck, European govt's are routinely over 50% of GDP in terms of government spending. How are they doing these days as they approach a triple-dip?

Who's suggesting we spend money frivolously? Everyone agrees it should be spent responsibly. The examples in the article are pretty clear.

[Baldy]

Or doing it cost effectively. Just spending money to spend money has never solved anything. Heck, European govt's are routinely over 50% of GDP in terms of government spending. How are they doing these days as they approach a triple-dip?

Who's suggesting we spend money frivolously? Everyone agrees it should be spent responsibly. The examples in the article are pretty clear.

We're talking about the government. By it's very nature, it does not spend money responsibly.

Now, I'm sure you will go knock down the interwebz and find the rare exception to the rule, but no entity out there is as inefficient as the government.

[HI54UNI]

What a bunch of drivel.

[youtube]https://www.youtube.com/watch?v=5hfYJsQAhl0[/youtube]

[GannonFan]

Or doing it cost effectively. Just spending money to spend money has never solved anything. Heck, European govt's are routinely over 50% of GDP in terms of government spending. How are they doing these days as they approach a triple-dip?

Who's suggesting we spend money frivolously? Everyone agrees it should be spent responsibly. The examples in the article are pretty clear.

I said cost effectively, you've taken it further to frivolous, so I don't see anyone other than you discussing frivolity.

As for the article, it does talk about vaccines and the such and in that area, government spending has been and will continue to be not cost effective. Government spending in the vaccine market has essentially crowded out private investment in that field, to the point that many vaccines are now difficult to source because people can't make money in that market. Sure, you can mock people who want to make money making things that people need to stay alive or avoid an infectious disease, but the reality is, the CDC isn't the primary inventor or researcher of medicines and vaccines that we have today - people who had the creativity to do the research and knew their work could bring them a profit were and still are the best sources of that innovation. When we crowd them out or make them do something else because it is no longer cost effective for them to do that work, then ultimately we as the population suffers when we don't have a cure or antidote for an infectious disease or when we can't reasonably manufacture enough of the antidote in time. Ebola is one example, but even thinking back to the swine flu scare and the fact that we had to produce the vaccine in France inside live chicken eggs because there had been no innovation since the vaccine was discovered and the process hadn't been improved because any investment in those improvements would never be recoverable is a pretty stark example. Spending for spending sake is never a good idea.

[SDHornet]

Speak all you want about the Fed not being cost effective, but this was a swift and effective kneecapping of a kalm economic policy thread. Jeezus.

[kalm]

Speak all you want about the Fed not being cost effective, but this was a swift and effective kneecapping of a kalm economic policy thread. Jeezus.

So I missed.

Like any great shooter, I'll just keep shooting!

[AZGrizFan]

Speak all you want about the Fed not being cost effective, but this was a swift and effective kneecapping of a kalm economic policy thread. Jeezus.

So I missed.

Like any great shooter, I'll just keep shooting!

Dude, you strike out more than Mark Reynolds.

[kalm]

So I missed.

Like any great shooter, I'll just keep shooting!

Dude, you strike out more than Mark Reynolds.

Who?

[CAA Flagship]

So I missed.

Like any great shooter, I'll just keep shooting!

Dude, you strike out more than Mark Reynolds.

[kalm]

Dude, you strike out more than Mark Reynolds.

Shut up Flaggy!

And which basketball team does Reynolds play for?

[CAA Flagship]

Shut up Flaggy!

And which basketball team does Reynolds play for?

http://www.baseball-reference.com/playe ... html?redir" onclick="window.open(this.href);return false;


Note the bold numbers. Those represent the league leader.

[kalm]

Shut up Flaggy!

And which basketball team does Reynolds play for?

http://www.baseball-reference.com/playe ... html?redir" onclick="window.open(this.href);return false;


Note the bold numbers. Those represent the league leader.

Ahh...so I used a hoops analogy and Z comes back with a baseball player.

I used to like baseball until I realized the players are bigger diva's than the NBA and they're lazier than PGA tour pros.

[CAA Flagship]

http://www.baseball-reference.com/playe ... html?redir" onclick="window.open(this.href);return false;


Note the bold numbers. Those represent the league leader.

Ahh...so I used a hoops analogy and Z comes back with a baseball player.

I used to like baseball until I realized the players are bigger diva's than the NBA and they're lazier than PGA tour pros.

Ever try to hit a curveball, whether you know it's coming or not?

[kalm]

Ahh...so I used a hoops analogy and Z comes back with a baseball player.

I used to like baseball until I realized the players are bigger diva's than the NBA and they're lazier than PGA tour pros.

Ever try to hit a curveball, whether you know it's coming or not?

Do you like movies with gladiators ?

[CAA Flagship]

Ever try to hit a curveball, whether you know it's coming or not?

Do you like movies with gladiators ?

Don't call me Shirley.