[Healeys] Your tax dollars NOT working

[Simon Lachlan]

It's called the "Multiplier Effect" or at least it was many years ago when I
studied economics. It works on both sides of the economy....I spend 10, say,
pounds at Joe's Emporium which enables Joe to spend, say, eight ponds at
Fred's which enables Fred to spend, say, seven at..... It's supposed to work
like that. The UK's Bank of England has just announced another round of
"Quantative Easing" (printing money) which is supposedly a stimulus to
liquidity. Perhaps the idea is that, if I spend a billion pounds at Joe's
Emporium, Joe can.......but on a population wide basis. Mind you, it's my
money they're printing and diluting...
(I think most of my first year's studies came out of a book by a guy called
Samuelson which probably dates me somewhat!)

-----Original Message-----
From: healeys-bounces at autox.team.net [mailto:healeys-bounces at autox.team.net]
On Behalf Of robertduquette at sympatico.ca
Sent: 05 November 2009 15:13
To: Healeys
Subject: Re: [Healeys] Your tax dollars NOT working

I'm fairly ignorant on these issues, but I thought the idea was to get money
moving when people were being cautious, as well as saving jobs.



Every time a dollar moves ... ( I'm sure you'll be shocked to hear this )
...
it's taxed.  So, someone buys a car, and the gov't gets sales tax, the car
salesman and dealership earn money and pay income tax, the car gets plated,
insurance gets upgraded, the insurance company pays more income tax, the car
salesman spends his extra money and pays sales tax and the person who sold
him
that "something" pays more income tax and spends his extra money ...  The
new
car owner will probably spend some more money on his new "investment" for
loving care that he wasn't providing for on his clunker ... new floor mats,
wax, etc.  He probably signed on for scheduled dealer maintenance for a
while
too, so he pays sales tax and the dealer makes more money and pays tax ...



I think that the idea was to get the dollars moving.  The taxpayer probably
didn't really pay anything, though they probably did front the money.