Govenment spending doesn't disappear, it goes to contractors, employers, small firms, etc etc
They pay tax on their income and then pay money to other people in shops, who then pay tax and it all goes round and round. Turn off the tap and there's less money going round.
(PsychoChomp, Thu 27 Jun 2013, 12:22, 2 replies, latest was 12 years ago)

yes, but the government can't be expected to prop up the entire economy in this way

( Naked Ape call me Caitlyn, Thu 27 Jun 2013, 12:25, Reply)

Well they kind of can, seeing as how they're running the country and that.

( tangledupinblue hairy badge with moving eyes, Thu 27 Jun 2013, 12:28, Reply)

Yes, yes they can, this is what you are too stupid to understand.
The government can indeed prop up the economy for a short period of time until the economy grows enough to sustain itself.

But it takes the guts to actually invest with borrowed money, and also to stop that money being syphoned off by parasticic companies who don't pay taxes and banks who jsut sit on it. It actually has to go into peoples pockets, not into company balance sheets.
(Bazongaloid, Thu 27 Jun 2013, 12:33, Reply)

But I don't see any government being brave enough to take on the big tax dodgers,
Surely they employ too many people to just Fuck them off?
( Windy Pig I'm naturally quite suspicious about the moon., Thu 27 Jun 2013, 12:36, Reply)

That's the stupid attitude that is causing the problems.
All companies will adjust to whatever regulatory regime you forece them into, they won't leave, they won't move, they will stay and make a profit. It might not be as much profit as before, but it's still a profit.
(Bazongaloid, Thu 27 Jun 2013, 12:45, Reply)

No need to call me stupid, I'm just curious.

( Windy Pig I'm naturally quite suspicious about the moon., Thu 27 Jun 2013, 12:54, Reply)

I wasn't calling you stupid, it was saying teh attitude that a government has to kowtow to a business is stupid.

(Bazongaloid, Thu 27 Jun 2013, 12:57, Reply)

+ bi

( Monty Boyce, My cheese game is strong, Thu 27 Jun 2013, 13:03, Reply)

Ok, makes sense,
So, the thing to do would be to shuffle spending around to maximise it's potential for returns?
( Windy Pig I'm naturally quite suspicious about the moon., Thu 27 Jun 2013, 12:26, Reply)

The worst thing for an economy is to have money not doing anything, sitting dormant.

(PsychoChomp, Thu 27 Jun 2013, 12:28, Reply)

Initially the thing to do is to use the fact that the government can borrow at a better rate than anyone else,
and the fact that we have a soverign currency and therefore we can pretty much do whatever the fuck we like (in the short term at least) in terms of internal spending, to invest in capital projects now, not in five or ten years time, but now.

This puts money in peoples pockets which they then go out and spend, this in turn allows manufacturers to make money and pay taxes and after a while you get a self supporting economy and you can make cuts and raise taxes to pay off the debts you built up doing this.
(Bazongaloid, Thu 27 Jun 2013, 12:29, Reply)