Spending on people that are struggling gets spent on goods and services which increase economic activuty and velocity.

This is what Keynes had in mind. Spending money into banks, wars and already profitable corporations wasn’t.

The essence is in the nature of deficit spending. The aim should be full employment. Federal debt equals private savings remember. Those at the top have the savings and THAT is what should be taxed back into the real economy first.

Globalization, not Dem or Repub, is wiping out the middle.

MK

By the way, how is it that “for every dollar of government money spent on extending the Bush tax cuts, there’s only a 32-cent return on investment in terms of economic stimulus”? I don’t understand the thought, that the government has money to spend in the first place that it hasn’t already taken through coercion. More importantly, the assertion that a dollar of tax cut has a negative multiplier, or negative velocity, is absurd on the face of it. Is it being suggested that the economy contracts by a factor of three for each dollar of tax cut? The only sense I can make out of this is that Americans cannot mortgage their children and grandchildren fast enough to the Chinese, buying all the plastic and electronic junk at Walmart, so maybe that’s the point, that the money doesn’t stay here. In any case, the idea that spending can improve the economy has the cart before the horse. Only through investment, which is roughly equivalent to savings, can a society put off spending today to benefit tomorrow.

What your readers need to know is that while we’re experiencing catastrophic asset deflation in houses, inflation is rearing its ugly head already in such things as food prices. When a bank takes a deposit it can lend the money out, and so it does in normal times. But the check given to the borrower ends up in his bank, which in turn lends it out, and so on. This is called fractional-reserve banking, and a quick overview of the practice is easy to find. The best book for understanding the way our elites have robbed us blind through inflataion is Griffin’s “The Creature From Jekyll Island,” an easy and quick study of our banking system and the crimes of the Federal Reserve System. I apologize for repeating myself on this site, but this book will knock your socks off. It’s easy to read and it’s more like a book on espionage than on our central bank and its fractional-reserve banking spawn. The photos of the crooks involved is worth the price of the book, which is usually stocked in any large bookstore.

The Fed more than doubled the base money supply over the last 21 months or so, and if the banks start lending again, prices could go right through the roof as a result of this monetary explosion. Double the money supply in circulation, double prices. But, it’s not that simple. When this increase of base money first gets into the banking system–that is, into the hands of Goldman Sachs ad nauseam–the robber barons get to play with it for free. You and I get nothing but higher prices down the road. This is theft, an organized criminal conspiracy against the American working man and woman, and inflation is aptly called the stealth tax.

Let’s not quibble about our temperamental allegiances on domestic issues while the house burns down around us. The elites will naturally have their paper assets neatly tucked away for spending on the Riviera or some tropical island. Throwing out all the bums serving in Congress, which is all but a mere handful, is pointless since the media ensures that only a similar group of servile lackeys to the powers that be can ever come before the voters.