Re:United States loses AAA credit rating from S&P
by encoderer on Sunday August 07, 2011 @09:51AM
(#2856590)
Absolutely, no question. It's the same argument that econonmists make against acceptance of a so-called "service based economy" -- if I pay you $200,000 to build me a house, you've got $200,000 and I've got a house worth $200,000.
If I pay you $100 to clean my house, you've got $100, and all I've got is a clean house. Nice, but there's no market value. There's no multiplier effect.
But there is SOME utility to the gov't injecting capital in the form of military spending. As I mentioned in the comment below yours, the most extreme example of that is WWII, which finally and permanently ended the Great Depression, in a way that the WPA/etc building bridges just did not.
If I pay you $100 to clean my house, you've got $100, and all I've got is a clean house. Nice, but there's no market value. There's no multiplier effect.
But there is SOME utility to the gov't injecting capital in the form of military spending. As I mentioned in the comment below yours, the most extreme example of that is WWII, which finally and permanently ended the Great Depression, in a way that the WPA/etc building bridges just did not.