The problem with government spending is that the government has to get every dollar it spends. It's not that you can just add up all the expenditures and claim victory - there is an opportunity cost. Every dollar that the government doesn't borrow or tax is a dollar that would otherwise have been put to some other use. So the answer to "does it create growth" is "if it is allocated more efficiently than it would have been on the market, or if it solves a tragedy of the commons that allows growth to increase". For example, investment in transportation infrastructure (roads. canals.) can boost growth, and investment in basic security of property rights and enforcement of contract (police. military) boost growth can boost growth. Spending on cowboy poetry festivals and spending-for-the-sake-of-spending... less so.
Last edited by cpwill; 02-23-15 at 09:13 PM.
“If we must have an enemy at the head of Government, let it be one whom we can oppose, and for whom we are not responsible, who will not involve our party in the disgrace of his foolish and bad measures.”
- Alexander Hamilton. Spiritual father of #NeverTrump
As technology continues to increase hour productivity, and as long as we don't run slap out of resources, then we will continue to meet demand.As for printing faster than we produce, it might not be a problem now, but down the road who knows.
Inflation is caused by inadequate production to meet demand, so inflation isn't very likely unless demand starts to significantly outpace production.
The federal reserve sets a target inflation rate of 2% and strives to meet that target rate. Even with the best efforts of the federal reserve pumping new money into our economy, it hasn't been able to produce demand fast enough to exceed our production capability.
"He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)