Wednesday, December 10, 2008

Bang for the Buck. What a dollar of stimulus puts back into the economy...



Good article by Professor James K. Galbraith. Below is a chart that shows what a dollar of stimulus puts back into the economy, when spent on various things.



Read the entire article here.

2 comments:

googleheim said...

strong dollar brings higher standard of living ?

auto industry don't like strong dollar ?

farmers don't like strong dollar ?

exporters don't like strong dollar ?

is printing money the same as "spending" by way of crediting bank accounts where the Fed would then turn around and "deficit spend" these reserves ?

same process is supposed to mitigate deflation by causing inflation to counter act ...

http://www.guardian.co.uk/politics/2008/dec/10/bank-of-england-deflation

Bank of England could print more money to tackle deflation, says TreasuryGovernment fears move could be necessary to stop inflation dipping below 2% target

http://www.guardian.co.uk/business/2008/dec/10/germany-brown-stimulus

"The same people who would never touch deficit spending are now tossing around billions," said Steinbr├╝ck. "The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking. When I ask about the origins of the crisis, economists I respect tell me it is the credit-financed growth of recent years and decades. Isn't this the same mistake everyone is suddenly making again, under all the public pressure?"

googleheim said...

Looks like FOOD STAMPS for immigrants is the MOST efficient means to stimulate the economy.

However, many in USA would have them deported !

Pro-Immigrant proponents were right in that they contribute to the economy.

Immigrants can save and they can be twice as frugal as Americans, so in the face of contraction we want them to leave and to tighten their wallets ???

Many unionists were very anti-immigration.

Let's look at that for a second ...

Immigrants are going back to Mexico with a 1 U$D = 15 Mex Peso to their advantage. Less money is going to Mex though.

When immigrants go back to Mexico like the anti-immigration nazis wish, there is less demand here in the USA.

This is very significant and ironic. Less demand for food, less demand for housing, and ultimately less demand for AUTOs and PARTs - ironic ?