Quote:
Originally Posted by ChinoCoug
No Archaea, that is not an "analysis;" that has been in textbooks for the last half century. Engel's Law (re: food consumption) is the single-most accepted fact in economics. Even one ignorant of economics can deduce that the less you make the more of your income you have to spend.
A DC temple presidency member, who is a Fed economist and a Republican, favors cutting the regressive payroll tax and increasing food stamps so the poor can sustain their spending.
GAO employees would spend a % of the increase (public and private sectors), then whoever sold them the good/service would spend a % of their increase, ...
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A goodie, it's in the textbooks, that makes it right.
I will not articulate this correctly as I haven't ferreted it out completely, but intuitively I don't believe the poor spending on basic items is what has historically driven our economy. It's been the middle class spending on consumer items. Whether that's a great economic structure requires more complex analysis than I have energy to devote.
But simply focusing upon multiplier effect without investigating what is multiplied should also be a concern. I wonder if studies have focused upon that aspect. It's also tied to consumer confidence.