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The government is a major economic player, and when you take the government out of the equation, you reduce demand.
When you have less people working and less people spending, this depresses the economy. It is pretty simple, but then again RW don't play by the rules of reason, they make them up. They think that less people working and less people spending, stimulates the economy.
Right wingers believe that if you take demand out of an economy lacking demand, then demand will increase.
Why do people keeps saying how much the shutdown costed us, rather than saved us money?
The govt didn't pay most fed employees and the parks were closed. Why does that amount to a cost and not a savings?
If people are not paid then they cannot spend. If they cannot spend, economic activity declines.
And regarding the multiplier effect, if I usually go out for a meal and spend $50, that creates a lot more than $50 in economic activity.
I spend $50
The resteraunt pays its bills with that money (perhaps $30)
The wait staff buy gas on the way home, using their wage earned by serving me ($5 for arguments sake)
That basic $50 in spending resulted, very quickly, in $85 in economic activity.
Now imagine I didn't get paid my $50 to begin with - that hurt the economy by a lot more than $50
The people who depend on the tourists around the parks made no money.
Those tourist still had/have money so in the end there were other business' or people who made money. That tourist money didn't just vanish in thin air.
Because, instead of paying a skeleton staff to keep national parks open, police were paid to patrol the parks and arrest anybody who sneaked in (to land that they, as the public, own). In a police state, arresting prosecuting and imprisoning people is always the highest priority, above any other public considerations, and the means to do that can always be found, no matter what else has to be sacrificed.
They got an extra 2 weeks paid vacation and no work being done. The IRS collected no funds. The parks took in no revenue. The people who depend on the tourists around the parks made no money. Do you understand now?
-----------"IRS collected no funds "........
Was no Federal Income tax with held from pay checks during the shutdown ?
Those tourist still had/have money so in the end there were other business' or people who made money. That tourist money didn't just vanish in thin air.
Of course it all depends on what the tourists do with their unspent money. The economies affected short term are mainly the local and state around said tourist attraction. And that is money lost. Now whether that same potential money is subsequently spent elsewhere is another question.
The government is a major economic player, and when you take the government out of the equation, you reduce demand.
When you have less people working and less people spending, this depresses the economy. It is pretty simple, but then again RW don't play by the rules of reason, they make them up. They think that less people working and less people spending, stimulates the economy.
Right wingers believe that if you take demand out of an economy lacking demand, then demand will increase.
It has to fall back on the right, correct?
Read the constitution and realize what due process is. The POTUS made up new rules and the lib controlled senate backed him. However, the senate does not represent we, the people of the USA. The house of representatives is that faction of government and they were doing what they were voted into office to do. If any serves but a single term they did more for their constituents than a senator did in 30 years of planting his/her fat AZZ in a seat.
So much for your analysis of the role of government. I would love to see more such gems in another thread.
Why do people keeps saying how much the shutdown costed us, rather than saved us money?
The govt didn't pay most fed employees and the parks were closed. Why does that amount to a cost and not a savings?
Simple put, politician love the Keynesian crap: Keynes said, there is a spending multiplier, for example: if government spend $1, the economy will generate $3 in activity. Therefore, if government spend $1 less, it will withdraw $3 activity from the economy.
So that's why you have a government that keep on spending. Because if they don't spend, we don't get to eat.
I remembered Peter Schiff's analogy that is use between a producing country (China) and a consuming country (US). Peter said, US think if we don't consuming, the Chinese would have no jobs.
So put that in prospective, if other countries don't continue lead US the money to spend on their goods, the people in other countries will not have a job, they will lost their purpose.
Person goes to store and spends $3 on bread and eats it
How I look at the economy:
some people grow plants and harvest them
its put on a truck
It goes to a bakery.
they bake it into bread
someone drives a truck to bring bread to store
some person comes in and eat it.
So what happens if $3 is still paid at the store while everything that goes into making bread is shut down and there is no bread?
Bread savings?
In order to make this analogy work, you would have to come up with what the gov't produces that we were unable to buy during that period. All I can think of is jobs, which we will pay for anyway even tho the non-essential workers stayed home, and weaponry, which I am sure continued to be produced.
In order to make this analogy work, you would have to come up with what the gov't produces that we were unable to buy during that period. All I can think of is jobs, which we will pay for anyway even tho the non-essential workers stayed home, and weaponry, which I am sure continued to be produced.
Yours is more of a supply side view. The shut down resulted in economic losses mainly from reduction on the demand side.
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