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Can someone please explain anyone explain how government spending can help the economy get out of a recession?

  • Can someone please explain anyone explain how government spending can help the economy get out of a recession ?

  • Answer:

    It does not: We are supposed to be a capitalist society. Karl Marx predicted this would happen. There is a "LAW". in Economics called the "The Invisible Hand" The Invisible Hand is the Hand of the American consumer not the Federal Government. When the Federal government puts money into the economy and takes over businesses, we cease to be "Capitalist". We've moved from Capitalism to Managed Socialism. Managed Socialism is the Prelude to Communism. In other words, we have become the thing we hate -> Communism. Government spending undermines the very meaning of capitalism. Free Market enterprise means that if a business is not competitive, it should be allowed to fail, thus free market - "The law of the invisible hand has spoken". Our economy has become a "Bucket with a hole in it". http://en.wikipedia.org/wiki/Karl_Marx

ernesthi... at Yahoo! Answers Visit the source

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It depends on what they're doing with it. If they're using it to say, repair a ton of highways, that can help the economy by creating thousands of new jobs for people. That's what happened during FDR's time in office. He created thousands upon thousands of new jobs. Sure, they're temporary, but it starts a cycle which grows the economy, allowing those people the opportunity to get more permanent jobs.

Scott Evil

Doesn't make much sense does it? It's kind of like making your car payments and mortgage payments with your credit card, then calling it a success.

Jay S

Scott Evil got it right.

Ginger

Public works projects need employees. Those employees are paid a salary. They then spend that salary on housing, food, transportation, etc. The businesses that receive that money then have to (hopefully) hire more people to keep up with demand and cycle continues.

Wayne Z

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