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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (361234)12/3/2007 4:04:47 PM
From: TimF  Read Replies (2) of 1574518
 
Giving mortgages to people who can't pay them back, means you take a loss on a mortgage. Do that too often and your business will shrink or even disappear. There is a built in correction mechanism.

With government the build in operation works the other way. Government programs tend to grow whether or not there is extra demand for their services. The interest of the politician is to weld more power, both for its own sake, and perhaps to a greater degree to the extent it can get special interests to support him. If a government program has negative results, that often becomes justification to spend even more money, "look at all these problems, we need to spend money to clear them up".

I was using an extreme example to illustrate that government spending isn't a net zero to the economy.

In that example it wasn't a net zero. It was likely a net negative. In more extreme examples its a net negative even if the budgeted cost of the program aren't included.
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