There are many reports that the Obama economics team is using a multiplier of 1.5 to estimate the effects of government spending. The theory of the multiplier is that $100 of government spending is supposed to "stimulate" the production of $150 in increased wealth.
Obama also believes that the multiplier for tax cuts is only about 1, so much more wealth is created when the government spends money collected from taxpayers than when the taxpayers spend that money. The idea is that the taxpayers might save some of that money, so it won't flow around and create wealth.
Obama believes that the government can spend so that its dollars go to people who won't save any of it. They will help the rest of us by spending it all. They will be doing their patriotic duty while they watch big-screen TV's and eat at expensive restaurants.
Obama's team is making this stuff up as they go along. It can't possibly be true. But, being in a good mood, let's assume that it is true. Then the following is also true.
Here is how the wealth totals up per $100 counterfeit:
New Spending
Counterfeiter $ 10
Supplies 5
Charities 40
Unemployed 45
Multiplier effect 50 (on $100)
It's Fake Money -100
Counterfeiter - 10
------
$ 40
Every $100 that the counterfeiter prints up creates $40 in value in the economy, after accounting for the counterfeit money (it is fake) and the counterfeiter's share. There is no increase in taxes, and tremendous support for charity and the under/unemployed. This is a win-win situation for everyone. Let's get printing!
http://easyopinions.blogspot.com/2009/0 … ealth.html
Kind of shows the craziness of their plan with the stimulus....
Obama also believes that the multiplier for tax cuts is only about 1, so much more wealth is created when the government spends money collected from taxpayers than when the taxpayers spend that money. The idea is that the taxpayers might save some of that money, so it won't flow around and create wealth.
Obama believes that the government can spend so that its dollars go to people who won't save any of it. They will help the rest of us by spending it all. They will be doing their patriotic duty while they watch big-screen TV's and eat at expensive restaurants.
Obama's team is making this stuff up as they go along. It can't possibly be true. But, being in a good mood, let's assume that it is true. Then the following is also true.
Here is how the wealth totals up per $100 counterfeit:
New Spending
Counterfeiter $ 10
Supplies 5
Charities 40
Unemployed 45
Multiplier effect 50 (on $100)
It's Fake Money -100
Counterfeiter - 10
------
$ 40
Every $100 that the counterfeiter prints up creates $40 in value in the economy, after accounting for the counterfeit money (it is fake) and the counterfeiter's share. There is no increase in taxes, and tremendous support for charity and the under/unemployed. This is a win-win situation for everyone. Let's get printing!
http://easyopinions.blogspot.com/2009/0 … ealth.html
Kind of shows the craziness of their plan with the stimulus....
Love is the answer