rockoon
Victor Danilchenko thinks the federal budget has a lot to do with the economy.
Maybe in a communist country thats might possibly by some stretch of the imagination be true.
In the real world, the federal government simply is not that involved nor should it be.
Whether it should or shouldn't be so involved, the fact remains that it is. Between the fed budget affecting the stock and especially bonds markets, the fed's control of the interest rates, and the power to affect economic activity by keynesian deficit spendings, the government in USA does indeed have a very significant amount of control over the economy.
Please explain how the federal government is supposed to create jobs.
In any number of ways. Lowering fed interest rates creates a burst of economic activity, leading to higher employment. Deficit spendings can jump-start the recessive economy by pumping jobs and money into it directly. Government dealings with the private sector causes government money to be moved into the jobs produced by the said private companies... and many, many more.
Keep in mind that raising taxes in order to pay for these new jobs takes money out of the economy.
No, it doesn't. It
redistributes the money, by taking them from one sector and investing them into another -- which is often a good thing for the economy (just think of FDR and the New Deal). Your point is a simple flat-out falsehood.
Keep in mind that lowering taxes in order to increase the amount of money in the economy must come out of government programs which means fewer government jobs.
Supposedly tax reduction also places more money into the private sector, accelerating the spending cycle and thus creating more jobs. Not that this generally compensates for the deleterious effect of servicing an exploding public debt...
The only way the federal government can effectively create jobs is to borrow money from outside the economy.
Again, flat-out false. The money is usually borrowed from existing pools (like SS) and from the populace via bonds. In a recession, most investment strategies may be unpleasant -- when the stock market is tanking, most people lose money -- but the gov't bonds provide guaranteed return, stimulating people to invest, and thus bringing the $$ back into rapid circulation. This is what keynesianism is about WRT government economic oversight, after all.
Are you by any chance an adherent of austrian school of economics?
