Re: The economy - William - mark
Stagg, that is the Keynesian theory that all spending produces an increase in aggregate demand and therefore it is good. But I think studies have shown that some types of spending produce more in taxes (and some types of tax cuts actually pay for themselves because of the multiplier effect). Also, increasing govt spending in order to increase aggregate demand is good when aggregate demand needs help. If the market is already producing sufficient aggregate demand, then why should the govt increase spending (and by the way, the spending always goes up). If I remember correctly, Keynes originally believed that the govt should only run deficits in times of recession and should otherwise run a neutral or budget surplus.