Stimulus

Marco Rubio, the Republican candidate for the senate in Florida has an interesting economy theory. If you give millions of dollars to a rich man it will stimulate the economy. However, unemployment benefits do not. His reasoning: the amount of money an unemployed person spends is too small to make any difference. I am unconvinced. The rich man will spend a chunk of the money on expensive imported clothes, jewelry, cars and foreign vacations. These clearly do nothing to stimulate the domestic economy. In contrast, the unemployed man will spend on groceries and locally provided services. That money will be recycled over an over in the local economy. The problem is not that there is a shortage of money, but that those that have it are just sitting on it, waiting for better times to invest or spend it. If you give the rich more money, they will just sit on that money too, making matters even worse. What is needed is incentives to the rich to get them investing and disincentives for just sitting on money.

~ Roedy (1948-02-04 age:70)