Economics Questions

Re: Obama's Stimilus Bill

Wanderer — Mon, 23 Nov 2009 00:48:50 GMT

Like all government spending, it distorts the flow of resources from what should be produced/serviced (via free market choice) to what the government wants. Private production, investment, etc. are all reduced.

Re: Obama's Stimilus Bill

Nebelwerfer — Mon, 23 Nov 2009 00:11:59 GMT

It screws up the capital scheme. Instead of goods being produced based on what consumers demand, goods are being produced based on what politicians want. There are two things that can happen then. Either the government subsidy becomes permanent and distorts the market for as long as the subsidy/government exists. Or the subsidy ends in a short amount of time, consumer preferences take over, and the market has to readjust. This readjustment is the solution to the government-induced problem, but it takes some pain and time.

Re: Obama's Stimilus Bill

Knight_of_BAAWA — Mon, 23 Nov 2009 00:10:17 GMT

Fewer private workers = less production for consumer goods.

Obama's Stimilus Bill

Novus Zarathustra — Mon, 23 Nov 2009 00:03:30 GMT

So I just finished reading 'Public Works Mean Taxes' of Hazlitt's 'Economics in One Lesson'. I want to try to apply this to Obama's stimulus bill.

The stimulus bill deficit is supposed to create public jobs in medicine, health technology, energy, transportation, and stem cell research. Not only is this $3 billion taken from the taxpayers, but it seems that it only creates jobs for the "public sector", all the men that will be put to work will be taken from the private sector, which means that there will be less workers and production in the private sector.

But how will this effect production?