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Politics : Politics for Pros- moderated
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To: DMaA who wrote (377491)8/10/2010 10:11:05 AM
From: Elroy  Read Replies (1) of 793931
 
That is the problem with magical economics like yours. It completely ignores the fact that to get a dollar for a drone to spend you have to take $1.50 from productive folks. Net everyone is poorer.

No, the government spends more than it takes in in taxes, so $1.50 taken from me in taxes is going to end up more than 100% in the hands of people who are probably spenders and not savers. You're correct that $1.50 of my taxes may generate only $1 for a welfare recipient, with the other 50 cents going to pay government salaries. The government worker likely spends the majority of his salary as well, so the 95%+ of my $1.50 will likely get spent. Money that falls into a black hole in a bureacracy comes right back into the economy in the spending patterns of the wasteful bureaucrat who is getting his take.

What I'm wondering is whether the economy as a whole is better if I've got $1.50 in the bank, where I'm going to let it sit in perpetuity, or the $1.50 is taken from me and given $1 to some welfare recipient (who is going to spend it) and 50 cents to pay the bureaucracy that takes it from me and gives it to him/her. The bureaucrat is also more like to spend a good portion of that 50 cents than I am my $1.50 (had the government not taken it). The question is is $1.50 sitting in a bank account better for the economy than the same $1.50 in the hands of folks (undeserving as they may be of my money) who are going to spend it?

Intuitively it seems better for the economy as a whole in the hands of spenders rather than sitting in the bank.
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