The Greatest depression is coming, are you ready?
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The Dow Jones industrial average is up 26% in the last year. One would think that is a great return. The problem is that gold is up 40%. Think of Gold as a "standard" measure of value. If Gold is up 40% what it really means is that the value of the US dollar is down by 40% in a year. Don't measure the Dow in terms of dollars, measure it in terms of gold and then you see that in reality the Dow was down 14% in the last year. That is awful.
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This is an interesting concept and it is true, government debt can lead to the country becoming richer. This happened with FDR, he put a whole lot of people to work with government money that they borrowed. Those people spent every dollar on rent, food and bills. So the money the government gave them got recirculated into the economy, several times and came back to the government as tax revenue and they estimated for every $1 FDR spent the US got back $1.50. However, you have to fulfill one very key criteria for this to work. The best way to illustrate this is with an analogy.
Suppose I want to siphon gasoline from my gas tank into a bottle. The gasoline will flow of its own accord as long as I hold the one end lower than my gas tank. So in this analogy the gasoline is money, the gas in the tank represents wealthier people (higher level) than the gas going into the bottle. As long as the government is putting their money into people poorer than they are taking it from this might work. The reason that FDR got such a good return was he was putting the money into unemployed people who were employable. If you simply give money to drug addicts and others who are unemployed for a reason you will not get a return.
One thing the government has done is finance research into weapons. That money provides jobs to scientists and engineers, who in turn will spend the money and it will come back to the government. However, they would have gotten jobs with or without the government funding, so although this does pay off it is much closer to 1:1.
But then what doesn't work is when you have Oligarchs giving money to campaigns which then result in government contracts to make these people rich. In this case you are taking money from tax payers and giving it to the rich. That is like trying to siphon it from the bottle at a lower level into the tank at a higher level. It won't work.
Suppose I want to siphon gasoline from my gas tank into a bottle. The gasoline will flow of its own accord as long as I hold the one end lower than my gas tank. So in this analogy the gasoline is money, the gas in the tank represents wealthier people (higher level) than the gas going into the bottle. As long as the government is putting their money into people poorer than they are taking it from this might work. The reason that FDR got such a good return was he was putting the money into unemployed people who were employable. If you simply give money to drug addicts and others who are unemployed for a reason you will not get a return.
One thing the government has done is finance research into weapons. That money provides jobs to scientists and engineers, who in turn will spend the money and it will come back to the government. However, they would have gotten jobs with or without the government funding, so although this does pay off it is much closer to 1:1.
But then what doesn't work is when you have Oligarchs giving money to campaigns which then result in government contracts to make these people rich. In this case you are taking money from tax payers and giving it to the rich. That is like trying to siphon it from the bottle at a lower level into the tank at a higher level. It won't work.
Now suppose the US government takes 1 million unemployed people and gives them jobs. These people will be buying groceries and the grocery store will need to hire some more workers, they will eat at restaurants and the restaurants will need to hire more people. they will live in apartments and so construction workers and others will get jobs building the apartments and taking care of them. The government hires 1 million and you wind up getting 1.5 million jobs. However, five years from now they are not generating new jobs anymore, so then from that point on it is a drain on tax payers. What you want from a government works program is that it is temporary, perhaps it takes unemployed people, gives them a job, trains them, and then they leave and go into the private sector within two years.