Per Obama's Stimulus': How Can Spending Money Improve Money and Debt Problems?

Obama's idea is not dissimilar to your selling your Condo, he hopes that by putting money into work creation schemes the money coming back will be greater than the investment. However Government jobs only circulate money they don't create wealth. Which is I believe the point you are trying to make. You sold your none performing asset (your condo) which helped get rid of some of your debts, and lowering your overheads (equivalent to lowering taxes) you then had more energy to put into getting rid of your remaining debt. (Been there done that bought the T shirt) Margaret Thatcher got a lot of stick this side of the pond for explaining things the way you have, being accused of not understanding Economics. Well she was right then and I believe you are right now. At the moment our top honcho Cameron (could do better, but there is a lot worse) is getting stick for trying to cut spending and lowering borrowing and reducing taxes, but oddly the people shouting loudest are not the ones feeling the pinch, they are complaining about how it will affect the low paid. Who are just having their taxes cut? and will be financially slightly better off.

I'm not an economist, but I do see the point in doing that. You see, the big difference between home economics and state economics is that the state does not work, but collect from other's work. So if the state spends in areas where the net result is an increase in the income, the state receive more money through taxes. I don't remember the exact equation, but the interesting thing is that under certain circumstances, the return is more than the spend. Putting it to an example, imagine you invested in something, let's say the condo. You bought it at X value. so you have a net spend of X. But after some time, the condo increased its value to X+Y, so you sell it (collect) and the total result is positive Y. Of course is risky, and depends on lot's of variables, but that's the idea behind. The problem with the conservative approach is that you lower the net income, so the taxes are less and finally, the result is more debt. It's hard to plan a win-win scenario, but under the actual paradigm, it is better for the stat to spend some money in certain areas in case of debt and in others in the opposite case.