View Poll Results: Does governnent spending produce economic growth?

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  • Yes

    241 68.08%
  • No

    13 3.67%
  • Sometimes

    100 28.25%
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Thread: Does governnent spending produce economic growth?

  1. #11
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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?
    The spending will almost always increase economic growth, but the money must come from someone, who has less. That will decrease the GDP. Both sides of the Transaction have a multiplier one positive one negative. Also, both sides will impact over time.

  2. #12
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    Re: Does governnent spending produce economic growth?

    It may grow the GDP but it also grows debt. The money had to come from somewhere and GDP growth does not always equate to a healthy economy.

    Is it a smart and effective stategy for pulling a economy out of a slump ? Hell no.

  3. #13
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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?
    Yes. Government contracts and services create jobs.
    “The people do no want virtue; but they are the dupes of pretended patriots” : Elbridge Gerry of Mass; Constitutional Convention 1787

  4. #14
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Bob Blaylock View Post
    Wealth and economic growth are produced by industry, by converting labor and raw materials into goods and services that are worth more than what it cost to produce them.

    Government very rarely does that. Government very rarely does anything better, economically, that moving wealth around, consuming some of it in the process. Any wealth that anyone gets from government, is wealth that government took from someone else. Any economic activity that is stimulated in one part of the economy, is at least matched by a suppression of economic activity somewhere else.

    As you correctly understand, the tax returns that that people receive, that spur them to buy stuff, is their own money that government previously took from them. Though it means, at that part of the year, that these people have a sudden short burst of money, stimulating a short burst of spending and economic activity, that is that much less money that they had the rest of the year, reducing by that amount the more steady spending and economic activity in which they would have engaged.
    When the government prints money that it does not have, it can spur industry into converting raw material and labor into goods, thus creating jobs and increasing consumption. Of course this sort of Keynesian view can lead to debt. However, the U.S. government has accumulated quite a bit of debt and the economy still appears to be going. How do you explain that?

  5. #15
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    Re: Does governnent spending produce economic growth?

    You pump enough capital into any economy and it will grow. That does not make it correct or sustainable.
    "Conservatism is the blind and fear-filled worship of dead radicals."
    - Mark Twain
    Run your own nation, play Cybernations.

  6. #16
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by joG View Post
    The spending will almost always increase economic growth, but the money must come from someone, who has less. That will decrease the GDP. Both sides of the Transaction have a multiplier one positive one negative. Also, both sides will impact over time.
    It doesn't necessarily have to come from someone. The U.S. government prints money all the time.

  7. #17
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by OrphanSlug View Post
    Yes, which explains well why government spending is part of the calculation for GDP

    and we're done.

  8. #18
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Fenton View Post
    It may grow the GDP but it also grows debt. The money had to come from somewhere and GDP growth does not always equate to a healthy economy.

    Is it a smart and effective stategy for pulling a economy out of a slump ? Hell no.
    Why does it have to come from somewhere?

  9. #19
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by American View Post
    The question is not whether it produces economic growth, the question is....is it the most efficient way to produce economic growth?
    I think the answer is a definite "sometimes".
    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. #20
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    When the government prints money that it does not have, it can spur industry into converting raw material and labor into goods, thus creating jobs and increasing consumption. Of course this sort of Keynesian view can lead to debt. However, the U.S. government has accumulated quite a bit of debt and the economy still appears to be going. How do you explain that?
    The standard conservative answer is "collapse is just around the corner".

    And even a broke clock is correct twice a day.
    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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