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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (40873)	2/2/2010 4:41:02 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Re: "High is a relative term." Yes it is. (But, in the context of "multiplier effects for spending programs" I DO NOT consider a number in the range of one and a half to be very high! In fact, I believe it to be low. It's right in the range that I would expect for MOST ANY government spending program, writ large. Such as military spending.) Re: "In this case I'm talking about high relative to letting the private sector keep the money itself through tax cuts" Ah, but SPENDING PROGRAMS are one thing. While not-spending-alternatives are clearly a horse of another color entirely! Not to say that the "multiplier effects" of the two disparate policy choices cannot be compared/contrasted! For they surely can be compared. But, there are additional steps you must first take in preparing the calculation of the eventual multiplier effect. (For example, if you 'leave money in some people's pockets' you CANNOT THEN ASSUME that they will immediately go out and spend 100% of it --- for they clearly will not. Some portion of it is likely to go into savings, some portion into paying down existing debts, etc. These choices will result in lower immediate multiplier effects, at least for those portions that are so allocated.) When comparing the "economic multiplier effects" from "spending choice A" to "spending choice B" (for example: spending X amount on road construction vs. spending the same X amount on a new fighter-bomber or on electrical grid for example) the comparison becomes much more straight forward.