Tuesday, December 21, 2010

A Stimulating Idea

There needs to be some level of safety net for the unemployed -- after all the government caused the problem in the first place. But the Democratic House supports never ending and unfunded benefits to the unemployed based on the assumption that this is a great stimulus to the economy - to them almost as good as raising taxes. They assume two things:

One premise is that the wealthy will not spend any money they get to keep in reduced taxes. The theory is that they will not spend on consumption but will only save it. (Which is a stimulating factor too.) Their conclusion is that people who have disposable income will not spend it on electronics, dining out, cars and other symbols of wealth. (?)
A second premise is that people who are getting the small unemployment checks will stimulate the economy by their spending. People in this situation have limited disposable income. They are buying – or should be buying – only what they absolutely need. But the conclusion is that unemployment benefits will stimulate the economy. (?)
So their economic analysis concludes that people with no money can stimulate the economy more than people who have money to spend.
Why are we listening to these idiots?

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