3 ms·
One is a rate of growth and the other is a rate of spending. It would be like comparing that you spend 8% of your income on food and that you got a 4% raise thi
by zeroonetwothree 3y ago
One is a rate of growth and the other is a rate of spending. It would be like comparing that you spend 8% of your income on food and that you got a 4% raise this year. The two numbers have nothing to do with each other other than using the same unit.
- rory 3y agoNo, that's a bad analogy. It's more like I borrowed 8% of my annual income this year, and then bought 4% more than last year. If I hadn't borrowed all that money, I wouldn't have been able to buy that much. It's both intuitively obvious and empirically demonstrable that government deficits stimulates economic growth in the immediate term, since most government expenditure happens in the domestic economy.