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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (215884)	2/1/2007 7:31:49 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 281500

>> You did not address the issue of where the $ came from. Pulling it out of the economy only to put a smaller fraction back in is invalid. Two points: (a) The theory explicitly states that it is talking about injection at the bottom of the economy WITHOUT matching taxation. Considering how big of a deficit we are running, I'd say that is the easy part <vbg> (b) there is another part to theory that you are ignoring and it becomes obvious when looked at in conjunction with the tax code. And that is this: The further down the food chain the money is injected/retracted, the greater its effect (this is simple math based on MPS). What is more, MPS is not constant through out the chain; the poorer the person, the higher the MPS. Again, this is a fact, not a theory. When you combine this fact with a progressive tax code, what you are doing is to remove money from those with low MPS (the "rich") and give it to those with high MPS (the poor), resulting in a net gain in the multiplier.