Quote:
Originally Posted by DirkFTW
I think I read there are 11.6 million unemployed people in the US. If the government set up a system whereby businesses could apply for $50,000 to legitimately employ an additional person, they could employ every unemployed person for only $580 billion.
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Which businesses should get the subsidies? After all, even I would hire a person in the $50,000 dollar rate if the government paid for it. He could wash my clothes or something...
Where does the money come from? After all, government is a redistributor of wealth. It has to take from someone either through:
- taking out loans (passing the debt on to our grandchildren... yep, that worked out just fine during the last 30 years or something)
- creating money out of thin air (stealing purchasing power from those who cannot increase their income immediately after this money is entered into the economy - that is: the poor and the middle class)
- taxing people which is very unlikely
The most probably scenario is the creation of new money (in your scenario and in the stimulus scenario of Obama), which is only going to make the real endgame crisis that much worse - that is: the dollar crisis.
Government has and will never stop a recession. It can only create them or prolong them. If they reduced their burden on society they might even stop a recession - but that is what they never do.