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> it destroys jobs The bedrock of corporate profit is consumer demand. We're in a vicious cycle where people are unemployed/underemployed -> consumer demand i
by smallnamespace 10y ago
> it destroys jobs
The bedrock of corporate profit is consumer demand.
We're in a vicious cycle where people are unemployed/underemployed -> consumer demand is depressed (because they have no money) -> companies don't hire (because nobody will buy their goods) -> people are unemployed
You have to break the cycle by first propping up consumer demand, and the most direct way to that is by giving consumers money to spend.
- mason240 10y agoThat's exactly what President Hoover tried to prop up the economy after the 1929 stock market crash.
- smallnamespace 10y agoAnd he would've succeeded if he was willing to blow up the deficit further. That actually happened with our entry into WW2, sharp increases in spending and hiring, and immediate end to the Great Depression (note that weapons, ships, planes and the like are about useful to a peacetime economy as digging holes in the ground--the key is you need to hire a lot of people to make them)
- notfromhere 10y agoAnd exactly how the WW2 recovery happened. Government created demand for products, and deficit spent until the economy roared back. Subsequent gov't surpluses from increased tax revenue were then used to pay down deficit.