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Unless I put that dollar under my mattress, it will be spent by someone, provided that we have stability in the banking system and regulatory structure (i.e. no
by webXL 15y ago
Unless I put that dollar under my mattress, it will be spent by someone, provided that we have stability in the banking system and regulatory structure (i.e. not yet, but getting there). With inflation, however, I'd be a fool not to spend it or earn interest on it (let someone else spend it, or let a bank finance the federal debt with it).
How does the government know what the correct level of spending for a given company is? How does government know how to "balance this out"?
- deleted 15y ago[deleted]
- latch 15y agoI'm not an economist, I can't answer any of your questions. I can tell you though that there's some historical data available (both at home, dating back to the great depression) and abroad (japan's lost decade) to base these types of decision on. My guess is that they spend in increments until they feel/observe that they have it right. Maybe they don't do a great job, but modern history seems litered with the impact of spending paralysis. Also, I just don't believe that a company investing money into some financial vehicle is more effective at creating growth than government spending. That's just taking it too far for me. Spending often needs to be directed, in a manner the private sector just can't do.