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Sure it does. In order to generate the money needed to pay the public workers, either taxes must be raised or the monetary supply changed. In either case this
by rplst8 11y ago
Sure it does. In order to generate the money needed to pay the public workers, either taxes must be raised or the monetary supply changed. In either case this affects the private sector economy that shifts investors away from using the capital they have to do some work.
- xenadu02 11y agoNot in a huge recession (or depression). Even in the current environment capital is extremely cheap and plentiful. In a depression with deflation there is a strong incentive for capital to stop investing because the literal zero-risk rate of return is positive (sit back and watch your dollar go further and further!) The economy has many variables and assuming that a condition holds for all situations is ideological, not factual.