Monday, October 4, 2010

Stimulus with a sting

Mike Pento explains:
"... all government stimulus comes from borrowing, spending, or printing, or to put it another way: deferred taxation, capital redistribution, or inflation. That means all US debt is ultimately backed by the tax base of the country. Therefore, whether the consumer or the government that does the borrowing is really unimportant because, in the end, it is the consumer that will receive the bill..."
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Comment: It is even worse because the debt-based governmental stimulus tends to destroy more jobs than it creates which means that in the end there is less productive capacity at hand while the debt burden has risen. Even more there is to consider that the jobs that are created by the stimuli are mainly unproductive jobs in the public sector which means that even without the burden of debt, the tax burden on privagte sector employment will rise with the stimulus.

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