Yes, Heritage deserves Jim DeMint

[cthulu2016]

...Spending-stimulus advocates claim that Congress can "inject" new money into the economy, increasing demand and therefore production. This raises the obvious question: From where does the government acquire the money it pumps into the economy? Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another.

Mr. Brian Riedl of the Heritage Foundation
http://www.heritage.org/research/reports/2010/01/why-government-spending-does-not-stimulate-economic-growth-answering-the-critics/

RW think tanks sound more and more like saucer newsletters.

An interesting turn of phrase... No new spending power is created. It is merely redistributed from one group of people to another.

In a really stupid sense, this is true. If someone, somewhere, buys an American treasury bond with $50,000, he could have instead spent that same $50,000 on replacing the roof of a nearby school, creating some employment, and transferring money to roofers who then spend it something roofers need, and so on.

To paraphrase Bette Davis: "But they didn't, Blanche. They didn't."

Yes, the bond buyer had the "spending power" of $50,000 but guess what? He was not going to spend that $50,000 replacing a school roof. Ever. Like... ever.

No new spending power is created. New actual honest to goodness spending is created... the thing itself. That is the whole point.



Also... "redistributed?" Gotta love that language. This guy must think that all commerce is a commie plot. When I buy a newspaper a dollar of "buying power" (what we people on Earth call "a dollar&quot is "redistributed" from me to 7-11.

But see, a bond sale is different. It isn't a purchase, like a newspaper. Jack-booted thugs from the government force you to buy that bond. Oh wait... they don't? Huh.

Oddly enough, when you buy a bond you are freely choosing to "redistribute" your "spending power" (aka money) to the government in exchange for a bond that is, to you, worth more than the money was worth to you. That's why we buy things... because the thing is worth more to us than the money is.

[bemildred]

1. Ignorant right-wing babble.

New spending power is indeed created out of thin air these days. There is some pretense being made that "balance" is maintained, that the creation of money will not get wild, but that is more show than tell, in fact they will make as much as they need, and it matters little as long as nobody wants to crash the system. And that has been pretty much Republican policy since Raygun too, not the Democratic Party, which has been the party of fiscal restraint, such as it is.