Originally Posted by
uneverno
http:///forum/post/3169054
Yes.
The short answer is it's good for the economy that people spend money now.
The problem w/ a consumer based economy that I rarely hear being addressed (and Capitalist, Socialist, Communist and Fascist are all consumer based) is that w/ a relatively stable population, it becomes increasingly difficult to sell more products that existing consumers already have. At some point, market saturation gets reached. This is true regardless of market sector. (For example, if the population isn't growing, Safeway can only sell so much food. If they can't sell more, they become a bad investment, which leads to investor flight, which leads to segment stagnation or regression, which affects other market sectors as people lose their jobs...)
Stimulating the economy is a temporary fix whether accomplished by tax break or incentive. Eventually the chickens come home to roost. Not only because the money has to be paid back, but also (and in no small part) because Government does not adjust its spending to account for the revenue losses they themselves legislate.
The question therefore becomes one, not of economic stimulus, but of sustaining growth in a situation where it's almost impossible to do so. Of the primary consumer economies, Europe, the US and Japan, ours is the only one w/ a positive birth rate, and barely so at that.
In the short term, the stimulus/break has potential to work. When people spend money other people remain employed. The other short term solution is to encourage immigration (legal or not is immaterial) because more people means more consumers.
In the medium term, the gov't would be better off creating stimuli to have children than stimulating current consumers to buy crap we don't need. 'Course eventually, the planet being finite, that will run its course.
In the long term, they'd be better off employing people to build the infrastructure of 3rd world countries in order to expand the existing consumer base there. That will also eventually fail. As those consumers get richer, (meaning their 1st world employers are paying them more) the cost of products to our own citizens also increases and in the end, the market still reaches saturation.
The economy is analogous to an aquarium. While you're building it, you can spend a ton of money 'cuz it's empty. Once it's full though, you can only maintain it. It cannot be further built.
Your analogy works, if you take out the wildcard of economics, which is technology.
You're also overlooking something VERY VERY important, by implying we as a group of people can reach a point of satiation on a macro level.
You can reach it for an industry, or a product. You will have a maturity that happens in a market, perfect example would be cell phones (they don't have a lot of growth for a first time buyer of cell phones). But you'll always have new technology, (iPhone) or innovation (data services) that allow something to continue growing. And eventually something new and improved will take its spot. (see what happened with pay phones or land line phones)
I do find it ironic, mildly humorous. Suggesting something that has been universally villified. (remember the brits, and east india trading company?)
