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> But a large portion of the money ends up in the F-35 itself, How does it 'end up' there? - A human being is paid in the end. This is the notion I don't belie
by neximo64 7y ago
> But a large portion of the money ends up in the F-35 itself,
How does it 'end up' there? - A human being is paid in the end. This is the notion I don't believe you're accurately looking at.
Say you were to pay the cashier $100 for your groceries, s/he wouldn't end up with the money either it would go to suppliers and seep back into the economy. Money is a bit like energy to a degree it can't be destroyed it ultimately ends up being spent again and again. Unless of course it goes into a bank account that is locked and never spent - for which inflation will tax it and even that would leak back.
The F35 is deliberately built in very high deficit areas to have the largest multiplier effect- this results in extremely good stimulus spending. Just to throw some numbers out there money spent this way (even if the end product is useless) ends up increasing GDP 30-60% more than the original spend. E.g $100 spent => $130-160m. It depends on the unemployment rate in the area but it can be as high as 3x. There is hardly a government program that can be as effective unless its building infrastructure, where it can stretch to as high as 7 (read Japan roads to nowhere)
The F35 is certaintly not a black hole. Almost certainly if you look at it in the way we buy things and consume them - then yes it is, almost 100%, but in terms of the economic effects its a very helpful project. If France had for example done this type of spending it would not be sitting in economic contraction territory at the moment - wheras the US hardly sees contraction because of this type of deficit spending.
- WalterBright 7y ago> ends up increasing GDP 30-60% more than the original spend. This does not take into account the deleterious effect of extracting the stimulus money from whence it came.