GOVERNMENT SPENDING CROWDS OUT PRIVATE SPENDING
I never could understand how more money in the economy stops Business from spending.
In fact, it seems like the opposite is true. If Government (Gov) spends money building or repairing roads, bridges, etc., that money doesn’t compete with private money. Gov money is created by the Congress and the State Legislatures. Gov money can be created by bonds that are paid off in the future rather than now from taxes.
Private money is not going to build roads for you and me. And if they are allowed to build such roads, you will pay for the roads with tolls that keep rising and that you keep paying forever.
Gov spending provides Businesses with more money because the people that work on the roads spend the Government money and buy things that the Businesses sell. That increased demand is caused by the Government money.
The economy is increased by the Government money spent on the roads. Also, there is a multiplier effect due to the Government money that increases the amount of money in the whole economy.
It seems to be a DUH that more money in the economy means more demand and more jobs.
I never could understand how more money in the economy stops Business from spending.
In fact, it seems like the opposite is true. If Government (Gov) spends money building or repairing roads, bridges, etc., that money doesn’t compete with private money. Gov money is created by the Congress and the State Legislatures. Gov money can be created by bonds that are paid off in the future rather than now from taxes.
Private money is not going to build roads for you and me. And if they are allowed to build such roads, you will pay for the roads with tolls that keep rising and that you keep paying forever.
Gov spending provides Businesses with more money because the people that work on the roads spend the Government money and buy things that the Businesses sell. That increased demand is caused by the Government money.
The economy is increased by the Government money spent on the roads. Also, there is a multiplier effect due to the Government money that increases the amount of money in the whole economy.
It seems to be a DUH that more money in the economy means more demand and more jobs.