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Politics : Formerly About Advanced Micro Devices
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To: combjelly who wrote (294795)8/14/2006 8:07:47 PM
From: TimF  Read Replies (2) of 1574489
 
What do you think they do with that money? Eat it? It still goes into the economy, just maybe not into the same places.

The money borrowed by the government also goes back in to the economy, but not in the same places.

And if the money hadn't been taxed or borrowed but instead invested or spent then it would also be in the economy.

Government uses real resources, the fact that spending might go back in to the economy doesn't negate this effect. Tax or borrow, and you have that negative effect.

Also the fact that the money goes back to the economy "in different places" means that more economy decision making is either political (the government deciding where the money goes), or driven by attempts to avoid the government grabbing money (people putting their money in tax shelters rather than just looking for the investment with the best risk adjusted return).
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