Simple Economics, Simply Explained III

In order for you to buy things, they generally must first be manufactured, which requires that someone have a job in manufacturing the shit you want to buy. When you spend money, you almost always do so on things that were manufactured by people with jobs. And when we as a nation stop spending money because we’re worried about our own jobs, that means that the jobs of those people who produce the shit we want to buy with our money are in danger.

Likewise, if the government begins to spend money, its equally expected that they buy things produced by people who have jobs. If those people were in danger of losing their jobs, they might not be now, because the government is spending money. Thus government spending is a good thing in a down economy, because it replaces some of the demand lost to the market because we’re all scared of losing our jobs.

Cutting taxes, however, only benefits those people who have a source of income. That’s a smaller and smaller number of people with each passing day. Fully 7.6% – getting damned near one out of ten – of our population is getting no income to speak of at all. And those who are still getting paid are, again, afraid to spend any money and will likely use any extra cash to either save it up, or pay down credit card debt.

And as explained in another Simple Economics post, a dollar of spending is the same as a dollar of tax cuts in terms of our government’s budget.

See? Tax cuts = Republican bullshit. Stimulus (or spending or whatever) = saving our economy. Simple.

By Tommy Belknap

Owner, developer, editor of DragonFlyEye.Net, Tom Belknap is also a freelance journalist for The 585 lifestyle magazine. He lives in the Rochester area with his wife and son.