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Old 02-20-2009, 03:10 PM
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Starkipraggy Offline
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Default Re: Obama's Stimulus Package: Direct Translation

I was under the impression that spending is beneficial for the economy. The production of consumer goods would create jobs while the consumers get a higher standard of living out of it. Everyone wins.

The economy can be analogised to water cycles. If water remains in one place too long, it stagnates and becomes worthless, as with the Dead Sea. Money has to flow in order to keep the economy running, and while saving is a good thing, if everyone saves and cut spending, less money would flow, which would be bad in a time when no money is flowing in the first place.

Besides, the extra 8 to 10 dollars is government provided, so basically they're telling you to go out and buy stuff. If I recall correctly, buying stuff is an immediate boon than saving, which merely stabilises the economy.
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