Where is your stimulus money going?

By the way, if the government paid me $100,000 to move a pile of rocks from one side of my yard to the other, and then paid me another $100,000 to move it back, GDP would go up by $200,000.

How about cash for clunkers? The government spends $x to destroy something worth $y. Where is the wealth gain here?

Your argument might make sense if the government spent money efficiently. But they don't. Higher GDP doesn't necessarily mean we get nicer cars or bigger houses. It could mean a mess got moved from one side of my yard to the other.
 


HBZSoftware.com said:
By the way, if the government paid me $100,000 to move a pile of rocks from one side of my yard to the other, and then paid me another $100,000 to move it back, GDP would go up by $200,000.

How about cash for clunkers? The government spends $x to destroy something worth $y. Where is the wealth gain here?

Your argument might make sense if the government spent money efficiently. But they don't. Higher GDP doesn't necessarily mean we get nicer cars or bigger houses. It could mean a mess got moved from one side of my yard to the other.
Click to expand...

I was studying for a macroeconomics exam, so basically my entire post was the gist of what the exam was on. So not really sure why you disagree with me, they're basically facts unless I misunderstood a concept which is possible because I think I bombed the damn exam haha.
 
Megan McArdle gets it right in the November issue of The Atlantic when she says GDP "counts the dollar value of our output, but not the actual improvement in our lives, or even in our economic condition."

If anyone wants a short, elegant treatise on economics, read Henry Hazlitt's "Economics In One Lesson." It's free here...

Economics in One Lesson

Much of it was written to address FDR's make-work programs funded by stimulus.
 
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