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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (300015)	8/14/2006 11:01:43 PM
From: TimF	Read Replies (1) \| Respond to of 1575466

You seem to be arguing that government encouragement of spending is the best way, or at least a good way, to achieve long term economic growth. I disagree. The government can provide a quick stimulus which if timed correctly might be useful, at least in smoothing out growth and making the troughs not as deep, but it isn't a long term solution. The only way that putting the money in the hands of poor people increases demand and velocity is by biasing the system towards spending. They might spend the money more than the wealthy, who would be more likely to invest it. No long term benefit in that. In practice it is rather a loss, as the taxes to maintain the redistribution reduce the after tax return on investment (providing less incentive to invest), and distort investment towards tax avoidance rather then more productive investments with higher pre-tax returns.