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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (118341)	12/20/2000 4:52:43 PM
From: Neocon	Read Replies (1) \| Respond to of 769670

Actually, it would be preferable if government treated capital expenditures differently than ordinary spending. If the government helps to increase the GDP, it has borrowed wisely. By hypothesis, we would not create more debt, but would be retiring it. After that, why spend money that we might not have to by paying off bonds early? Some people would cash in early, and all would be paid in at least slightly inflated dollars, so paying early would lose a fair amount of money. I am therefore presuming that we would hold money in reserve against future contingencies, and take the lock box image as the correct one. If we do not spend money, or use it to back loans, we are taking it out of circulation. If we take it out of circulation, buying power decreases. Thus, we reduce demand, in the sense that there is less money to buy things with. Thus, fewer goods are sold, or they must be discounted at a loss, driving some people out of business. As businesses fail at an increasing rate, unemployment grows. Voila! Recession.........