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Old 12-01-2008, 09:50 AM   #233
Ronald Pagan
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Join Date: Sep 2008
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Quote:
It makes no sense to throw money at the auto industry until we know what their plans are, and what the U.S. government is going to do about it. We could end up throwing money at Ford/GM etc and they could still close the Canadian plants down throwing workers out on their ass. Its useless to throw money into forestry and mining when purchasing is down across the board. Whats this Stimulus basically going to be? Lets pay the workers to stay home. Plus I can tell you now, if you take away the corporate tax breaks in a shaky environment, how many international companies with offices in Canada are going to just shut thier doors because there's no advantage to operating up here any more.
You might need a parachute for all those assumptions you're jumping to.

First you've assumed that you know what the stimulus plan looks like, bail outs for the auto sector. I'd like to know where you get this inside information. It's most like conjecture based on some topical economic issues.

Second, you've demonstrated very little understanding of macroeconomics.

Stimulus plans stimulate demand. Government's spend money to get people to spend more money either through job creation or higher real income. This is the multiplier effect. The amount that the government spends will be smaller than the total net economic effect. It's good policy, it's worked before. There are limits, of course, to its usefulness and applicability but most economists now agree that in these times, it would be good policy.

But thanks for your armchair analysis. It has been noted.

Last edited by Ronald Pagan; 12-01-2008 at 09:52 AM.
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