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To: Graybeard58

theres a big difference between spending on consumption and spending on investment

You spend it on food, the food is gone, and money is gone
You spend it to build a tv, sell it at a profit. Society has a tv and you have more money


7 posted on 09/30/2010 6:32:15 AM PDT by 4rcane
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To: 4rcane

Actually the grocery store makes a profit and could potentially lower its prices if it gains enough consumers. If it is a publicly traded company its shareholders will see an increase in value for their investment due to higher profits.

Consumption is a stimulus. When the money comes from the government (in the form of spending) it’s just a “shuffling” of money from consumers to the fed. The difference is government cannot accurately and fairly stimulate the market because its “needs” are artificial. When the government spends its (our) money it does not reach the parts of the market that need stimulus. They also take a huge chunk out of the money in “administrative” costs before it ever reaches the market.

Most of that money has made its way to union coffers to help buy the next election. The remainder went to various large contractors and new infrastructure. None of it created jobs or increased investment capital. All of it was taken from individuals that would have invested or consumed according to their real needs.


15 posted on 09/30/2010 7:25:28 AM PDT by RockyMtnMan
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