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a country can print as much money as it wants Printing money is essentially a tax, because it reduces the value of the currency everyone else is holding throug

• lotsofmangos 12y ago
  If you are sneaky and in a slump, and you give the printed money to the right folk, it can kickstart trade. This was the idea behind giving all that money to the banks, but the banks went and sat on it and now have the largest cash reserves for pretty much ever, so they were able to dump some of their other liquid assets, namely oil, which is a lot of the current glut we are blaming on OPEC. Economics is messy.
• diy123 12y ago
  Yes, in the short run. Who holds most of that money? In developing countries it is the elites. So if their holdings lose some value, they'll survive. But government spending puts money in the hands of people who need to work for a living. That will benefit the economy as these people will spend more and create demand. In the long run everyone becomes better off if a country undertakes a vigorous and well-thought out infrastructure program (including scientific infrastructure). Yes, I am a Keynesian.
  • ta75757 12y ago
    I suspect most elites hold little of their portfolio in cash. Sure, if the government taxes/borrows/prints to invest in things that help the economy that can have a positive net effect. I don't think hunting for neutrinos is a terribly great way to stimulate the economy. The best argument, I suspect, is the same as for NASA in the US: the fraction of the budget spent on it is tiny (assuming this is true in India's case).