Tuesday, October 28, 2008

Money.





Here's a handy-dandy chart showing various modalities the government can use to stimulate the economy. It seems that the most direct route is by stimulating consumer spending (rather than giving upper-income individuals or corporations more money to play with, invest, etc.). This is more or less the heart of the argument for tax benefits being aimed at the lower half of the income spectrum--i.e., people with less margin ('headroom") between their month-to-month spending and total income are more likely to go right out and spend that extra money than folks with no shortage of cash and a more diverse set of priorities. That's the basic idea, anyway.

As an added bonus, the fact that that munnie is in the hands of the consumers allows competition to play out in a way that it would not if it were, say, spread evenly to every business in the land. Winners, losers.

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