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Probably because that money wasn’t pumped directly into the US economy for the purpose of keeping the economic engine moving. You build a bomb, you blow up the
by UncleEntity 4y ago
Probably because that money wasn’t pumped directly into the US economy for the purpose of keeping the economic engine moving.
You build a bomb, you blow up the bomb, that’s money that’s just gone for good.
You give people money, along with negative interest rates so they don’t just hold on to the money, and that money spread out into the whole economy causing the price of goods to increase because of more competition for a finite amount of resources needed to produce said goods.
That being said, that 8 trillion dollars could have undoubtedly been spent in a more productive manner but that’s not the world we currently find ourselves in.
- vkou 4y ago> You build a bomb, you blow up the bomb, that’s money that’s just gone for good. The bomb is gone, the money isn't. It's still circulating, because the people working for the defense contractors who built the bomb got paid. The money was also created by the government borrowing it (As the war was financed by deficits). In our current financial system, loans expand the money supply. There's no significant difference in the impact on the economy between paying defense contractors money to build a bomb that you then explode, and paying them to sit around and pick their nose.
- UncleEntity 4y agoYep, that’s what’s called the broken window fallacy.