
12-03-2010, 02:38 AM
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Sha Tin
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Join Date: Aug 2006
Posts: 20,855
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Quote:
Originally Posted by Riot
That $300 goes immediately out into the economy as cash. It isn't saved.
Pretend $50 goes to the grocery store. The grocery then gives $20 out in salaries (which goes out again to groceries, rent, etc a second time), puts $5 into inventory (grows business) and he puts $10 out in car purchase (expands who gets part of that $300) and $5 out into his groceries, rent, etc.
Pretend $250 goes to rent. Repeat the above with the owner paying off the mortage, then buying groceries, etc.
That $300 goes out and circulates throughout the economy multiple times before it ends up "taken out" (into long-term capital investments, savings, etc) Each time it circulates, it requires a business to be open and have inventory, it supports salaries: grocery, truck line, grower of food, gas station owner, clerk, gasoline tanker driver, etc.
Bonds, etc. only make money that goes into the economy the first time they are sold. Trading stocks, etc. in the markets does NOT circulate money into the economy that causes growth.
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The problem with your theory is that all the jobs you believe are saved are all govt subsidized or in no danger anyway. The food production business is already massively subsidized by the govt, public utilities as well. The oil industry is hardly hurting (gas stations).
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