To: HPilot who wrote (679459 ) 10/17/2012 4:28:39 PM From: combjelly Read Replies (1) | Respond to Unless the spending increases infrastructure or does some other thing to directly increase industry, there is no gain. While that sort of spending is more desirable in so many ways, it isn't true that there is no gain. You are increasing the money supply. It goes into someone's pocket, and when they spend it, it improves the economy. The downside is if too much money is dumped too fast you can get inflation. That was what happened during the 1970s. The death blow was two events. The first was the collapse of the anchoveta fisheries off of Peru due to overfishing and a strong el Nino in 1972. The catch went from around 10 million tons per year down to around 4 million. The bulk of the fish wet into fish meal. Which was used for anything that need a protein supplement or even fertilizer. The only real substitute at the time was soybeans. But soybeans were, and still are, used for a variety of other products. This caused all sort of production disruptions leading to widespread shortages. The final blow was the Oil Embargo in 1973. That jacked up transportation costs enormously and quickly. . That led to a panicked atmosphere about shortages in general. Heck, Johnny Carson caused a toilet paper shortage with a joke in his monologue.
