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Does governnent spending produce economic growth?

Does governnent spending produce economic growth?

  • Total voters
    46
iacardsfan said:
It causes boom and bust cycles that can only be fixed through more pumping of capital and government bailouts. Eventually we are going to run out of money to do this.
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How can "we" run out of money when it just keeps recycling over and over again? Money never really gets used up.

And furthermore, how can we run out when we can print all that we need?

("we" meaning the guberment)

Oil may run out eventually, but never fiat money.
 
iacardsfan said:
It causes boom and bust cycles that can only be fixed through more pumping of capital and government bailouts. Eventually we are going to run out of money to do this.
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There would be boom and bust cycles even if the government did not do it. Actually to cycles are due to human greed, at least in my opinion.
 
imagep said:
How can "we" run out of money when it just keeps recycling over and over again? Money never really gets used up.

And furthermore, how can we run out when we can print all that we need?

("we" meaning the guberment)
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I dont sanction the use of individuals money to be reallocated to others for the sake of their economic benefit. As for printing more money, that would simply devalue our currency and foreign nations to keep away.
 
imagep said:
How can "we" run out of money when it just keeps recycling over and over again? Money never really gets used up.

And furthermore, how can we run out when we can print all that we need?

("we" meaning the guberment)

Oil may run out eventually, but never fiat money.
Click to expand...

As long as people accept the money that the government prints, yep it will never run out. The question is, will people keep accepting it.
 
iacardsfan said:
That seems to be the strategy.
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As long as money keep accumulating at the top, where it tends to enter the la la land that we call "Wall Street", we have to keep pumping more money, else Main Street wouldn't have any.
 
MildSteel said:
As long as people accept the money that the government prints, yep it will never run out. The question is, will people keep accepting it.
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We've been accepting it for the past 237 years, I think we probably will keep accepting it for quite a few more. I mean what the heck, why not?
 
iacardsfan said:
I dont sanction the use of individuals money to be reallocated to others for the sake of their economic benefit. As for printing more money, that would simply devalue our currency and foreign nations to keep away.
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The U.S. has been printing money to high heaven for years, yet the dollar is strong relative to many of the world's currencies. How do you explain that?
 
imagep said:
As long as money keep accumulating at the top, where it tends to enter the la la land that we call "Wall Street", we have to keep pumping more money, else Main Street wouldn't have any.
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that is happening even with government supply small businesses with great rates on loans, and taxing the wealthy to hopefully redistribute it downward. Hasn't exactly worked.
 
MildSteel said:
The U.S. has been printing money to high heaven for years, yet the dollar is strong relative to many of the world's currencies. How do you explain that?
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We are strong relative to other nations because Chinas slowdown and the Euro uncertainty has sent those investors to the dollar.
 
imagep said:
Only for the last two hundred and thirty seven years. Debt hawks tell me that two hundred and thirty seven years isn't long enough to prove anything, and hyperinflation and the collapse of the dollar is always just around the corner.
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We are probably dipping our toes knee deep in the deflation trap, but time will tell (actually to me time has already told this)
 
MildSteel said:
There would be boom and bust cycles even if the government did not do it. Actually to cycles are due to human greed, at least in my opinion.
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Human greed and irrational behavior.
 
imagep said:
We've been accepting it for the past 237 years, I think we probably will keep accepting it for quite a few more. I mean what the heck, why not?
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Yep, sure looks that way!

It's like a guy being stranded on a desert island with only one girl. :lamo
 
iacardsfan said:
I dont sanction the use of individuals money to be reallocated to others for the sake of their economic benefit.
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What about when it's for the sake of EVERYONES benefit (including the people who are paying their government bill).

As for printing more money, that would simply devalue our currency and foreign nations to keep away.
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If we printed money faster than the world could produce goods and services, yes. Not likely to happen anytime soon, especially in this global economy.
 
iacardsfan said:
We are strong relative to other nations because Chinas slowdown and the Euro uncertainty has sent those investors to the dollar.
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And the fact that it is strong relative to other currencies despite all that money printing appears to contradict your claim that it devalues the currency and keeps foreign nations away. People are still buying U.S. debt.
 
iacardsfan said:
that is happening even with government supply small businesses with great rates on loans, and taxing the wealthy to hopefully redistribute it downward. Hasn't exactly worked.
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It's worked pretty darned well for decades. Are we a poor nation?
 
MildSteel said:
And the fact that it is strong relative to other currencies despite all that money printing appears to contradict your claim that it devalues the currency and keeps foreign nations away. People are still buying U.S. debt.
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We either tax money away, or we borrow it away. At least when we borrow, it's the choice of the lender to loan it (or not), and it doesn't have to be done by force.
 
imagep said:
What about when it's for the sake of EVERYONES benefit (including the people who are paying their government bill).



If we printed money faster than the world could produce goods and services, yes. Not likely to happen anytime soon, especially in this global economy.
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I agree that the redistribution of wealth can be beneficial for all parties, but it is not the role of the government to force that.

As for printing faster than we produce, it might not be a problem now, but down the road who knows.
 
Declan said:
We are probably dipping our toes knee deep in the deflation trap, but time will tell (actually to me time has already told this)
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Yup, hyper inflation is always just around the corner.

Fortunately, we never seen to make it to that corner.
 
MildSteel said:
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?
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You are looking only at what is seen, and not what is unseen.


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.
 
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iacardsfan said:
I agree that the redistribution of wealth can be beneficial for all parties, but it is not the role of the government to force that.
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The roll of government is to do anything that the rulers want it to do. The rulers in the US are "We the People".

As for printing faster than we produce, it might not be a problem now, but down the road who knows.
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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.

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.
 
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