View Poll Results: Does governnent spending produce economic growth?

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  • Yes

    241 68.08%
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    13 3.67%
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Thread: Does governnent spending produce economic growth?

  1. #151
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Fenton View Post
    Everyone of my post is related to the OP including the one you just spammed
    Helpful hint: If your response is related to the OP it would be helpful for all concerned to respond to the actual OP. Or, at least some other post that was pertinent to your post instead of something that had gone off track a bit..

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  2. #152
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Mason66 View Post
    How can that be considered growth and not lateral movement?
    It depends on how the money would have been spent, and how is spent.

    If it is taxed away from someone who would have sunk the money into the near-black hole that we call the stock market, and if it is then spent on something that we need, like raising the height of a bridge so that big trucks can utilize the road, then the government spending may result in more growth than if it wasn't taxed away.

    However, I don't generally advocate higher taxes, I actually think we should lower taxes on the worker/consumer class in order to increase demand.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  3. #153
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    In addition to my regular job, I have been trying to develop a business. I have noticed two years in a row now that I experience a great boost in sales after people get income tax refunds. Now I realize that in that case, mostly people are simply getting back their own money. But it makes me wonder, does government spending produce economic growth? If I understand them correctly, some say that this is never true. What do you think?
    In a localized, short term view, yes, it does. In a national, long term view, no, it doesn't. In the short term, there is localized spending and growth, but over the long term, there is national loss of critical capital for investment into growth.


    This is one the things that so perfectly illustrates one of the biggest differences between liberals and conservatives. Liberals tend towards short term thinking and conservatives tend towards long term thinking. Both have their advantages and even necessities, but short term thinking always leads to more problems than it solves.
    Our nation has not always lived up to its ideals, yet those ideals have never ceased to guide us. They expose our flaws, and lead us to mend them. We are the beneficiaries of the work of the generations before us and it is each generation's responsibility to continue that work. - Laura Bush

  4. #154
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    In addition to my regular job, I have been trying to develop a business. I have noticed two years in a row now that I experience a great boost in sales after people get income tax refunds. Now I realize that in that case, mostly people are simply getting back their own money. But it makes me wonder, does government spending produce economic growth? If I understand them correctly, some say that this is never true. What do you think?
    It depends. First in your example of tax refunds, the idea is not that they are getting more money to spend, it is that they are getting more money in a lump sum to spend. To do a simplified example, if you are making 50k a year, and your effective tax rate is cut by 1 %, then you are going to be getting about an extra 10 bucks a week to spend. This is not going to really change your spending habits. But if instead of getting 10 bucks a week, you get a lump sum 500 bucks, then you are probably going to splurge and buy something. New TV, new furniture, or in my case a bunch of books and DVDs. If a lot of people get that extra lump sum at once, then it will create a short boost to revenue if your company sells something people want.

    Now to the meat of your question: does government spending produce economic growth. And as others have mentioned, the answer is that it depends. Up to the level of government revenue, the effect is probably a small reductionto a very small increase in growth(it more than likely varies by year and how the money is spent). However, the government does not spend to the level of revenue, it spends beyond that level. And that deficit spending also goes into the economy, creating more growth. So the end effect is an increase in growth.

    We can even measure the effect of government spending on particular items to growth. Here is an example(first google return, not commenting on the actual accuracy of the numbers themselves, just using link to illustrate concept): Infrastructure Economic Multiplier - Business Insider. The article states that the normal multiplier for government spending is 0.5 to 1.5, meaning that for each dollar spent, it grows the economy between 0.50 dollars to 1.5 dollars. The article also states that infrastructure spending(roads and such) reach a multiplier of about 2, or 2 dollars growth for each dollar spent. While I do not endorse the actual numbers(though they could very well be right, I simply do not have enough knowledge to say they are right or wrong), the concept is pretty solid.
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  5. #155
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Ockham View Post
    True - it could come from printing more money or borrowing and adding to the National Debt.
    But the national debt must be paid back at some point with money that came from somewhere else.

  6. #156
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by RFR View Post
    But the national debt must be paid back at some point with money that came from somewhere else.
    You and I and other normal people think so.... but don't believe for a moment that our government thinks that.
    I think if Thomas Jefferson were looking down, the author of the Bill of Rights, on whats being proposed here, hed agree with it. He would agree that the First Amendment cannot be absolute. - Chuck Schumer (D). Yet, Madison and Mason wrote the Bill of Rights, according to Sheila Jackson Lee, 400 years ago. Yup, it's a fact.


  7. #157
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by faithful_servant View Post
    ...there is national loss of critical capital for investment into growth.....
    No there's not. The same money can be spent over and over again. When money is taxed out of the private sector, it's immediately spent back into the private sector.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  8. #158
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by imagep View Post
    Printing more dollars only reduces value if they are chasing more goods than are available. Last time I checked, Walmart had plenty of stuff on it's shelves.
    That is incorrect - you are thinking of an inflationary cycle, which overlaps, but is not the same, and your evidence is anecdotal.

  9. #159
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by RFR View Post
    But the national debt must be paid back at some point with money that came from somewhere else.
    No, the national debt never has to be paid back. that's a myth.

    We have had a national debt every year since 1838 and every year before 1835.

    Every country in the world except for 7 have federal debts, and most of those seven are city-states or not much larger than city-states.

    Federal debt is one of the things that stablizes countries money supply.
    Last edited by imagep; 02-24-15 at 06:13 PM.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  10. #160
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Ockham View Post
    You and I and other normal people think so.... but don't believe for a moment that our government thinks that.
    If by "normal", you mean people who believe that governments have the same needs as people. then yea.

    People who actually understand economics apparently aren't normal.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

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