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Politics : Formerly About Advanced Micro Devices
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To: combjelly who wrote (798005)7/29/2014 4:16:07 PM
From: TimF2 Recommendations

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i-node
TideGlider

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Spending will always result in greater economic activity.

Yes and no.

As a definitional matter, spending is economic activity, whether or not it actually produces any benefit. Even with little real benefit measured GDP might climb. That is unless the spending is on activities that increases the burden on private sector wealth creation like additional regulations and the spending to cover them, or the same for adding a bunch of complex taxes and enforcement on them (which costs money). Sure the new IRS agents would get a salary and spend money on things, but enforcing higher and more complex taxes would not itself be creating wealth even if the GDP figures would count it.

Lower interest rates means you can borrow more money at the same recurring cost.

Until interest rates go back up and you have more debt at a higher reoccurring cost.
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