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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (172150)	9/16/2011 8:17:22 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 542193

<<<Some of the stimulus money like the tax cuts for the middle class and cash for clunkers - much of that money ends up in China. (Keynesian - yes) BUT, BUT, BUT not stimulative here in America. If the government borrows money and gives you a tax cut and go out and buy a new television with that money it is NOT stimulative to our economy even though it is Keynesian type spending. Why not; if it leaves America it doesn't turn over in the economy - doesn't stimulate. It is debt, it is Keynesian in nature (since the goverment is using deficit spending) but it is not stimulative. >>> Our economy is driven 70% by consumer spending. We have a global economy. Consumer spending has a local ripple effect. There are several assumptions in your paragraph that are disturbing. But stimulating our economy has a global impact. We are not isolated. Keynesian economics examines the impact of international commerce and is part and parcel of macro economics from a purely subjective perspective. If we can buy things cheaper from aboard than we can "manufacture" it ourselves - that helps to increase our standard of living. There are times in cash management, no matter how wealthy or poor you are, i t may be wise to borrow money to stimulate your economy - but that is what the study of Macro economics is all about - that understanding - among other things.