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Thread: One reason spending will not necessarily affect American economy

  1. #1
    Olympic Champ
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    Default One reason spending will not necessarily affect American economy

    Say people spend the money. If they buy imports most of the money will go overseas.

  2. #2

    Find Re: One reason spending will not necessarily affect American economy

    Don't worry about it Big, the government can always print more money.

  3. #3

    Default Re: One reason spending will not necessarily affect American economy

    I doubt that every dollar that's paid out in the new tax rabate plan will go to imports, but that is neither here nor there. Some money will be made domestically because the retailers here earn markup and there are product handlers and shippers in this country who earn some of the money spent.

    But, I agree with you that this rebate won't help our economy much. But, we may differ as to why.

  4. #4

    Default Re: One reason spending will not necessarily affect American economy

    Quote Originally Posted by skipster View Post
    I doubt that every dollar that's paid out in the new tax rabate plan will go to imports, but that is neither here nor there. Some money will be made domestically because the retailers here earn markup and there are product handlers and shippers in this country who earn some of the money spent.

    But, I agree with you that this rebate won't help our economy much. But, we may differ as to why.
    I agree. This will result in a short-term upward blip (IMO), but won't change anyone's behavior long-term.

  5. #5

    Default Re: One reason spending will not necessarily affect American economy

    That was essentially my reasoning. As I recall from economics class, tax incentives with the intent of jump starting the economy have failed when the changes weren't viewed by the public as permanent. If the public sees this as just a band-aid, it may not deliver the desired effect.

    But, we have seen in the past that tax cuts sem to decrease unemployment, increase investment, and increase government revenues -- again, only when percieved as permanent. Maybe perception is everything, after all.

  6. #6
    Olympic Champ RYou's Avatar
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    Default Re: One reason spending will not necessarily affect American economy

    Big, for most retail products, the largest percentage of the overall profit in the price goes to the seller not the producer/importer. While the US continues to lose the manufacturing jobs, the SU companies are making thier profit in the spread between cost of produciton and the wholesale price. The US retailers make it on the spread between wholesale and sale price.

    So, buying aids both the global economy as well as US sellers.

    Have you notice all of this garbage in the US has affected the stock markets in Europe, Asia, India, Australia ? It's because the financieers know the US population drives global consumption and when US buyers keep their hands in their pockets, it reverberates around the globe.

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