You really don't understand how it works.
It seems one of us doesn't.
ALL of the billion put in stimulus comes from borrowed money. Let me repeat that, we are talking about money the government is borrowing NOT money that the government is taxing.
Actually, the government has been looking at offsets for some spending, but the anti-deficit Committee for a Responsible Federal Budget had an interesting comment in 2008:
Stimulus does not have to be paid for, the committee said in a statement.
The committee is chaired by two veterans of deficit wars past, former members of Congress, Leon Panetta, a Democrat, and Bill Frenzel, a Republican.
We know, we know as strong advocates of PAYGO, it might be expected that we would argue that all stimulus should be paid for. While we commend those who are concerned with creating a fiscally responsible stimulus package, the very point of stimulus is that it not be paid for so that it injects extra money into the economy and helps to drive higher levels of consumption. If a stimulus package were paid for in the out-years, we would certainly be pleased. However, we believe that such a requirement is likely to derail the process of trying to assemble an effective stimulus package. We would prefer to see stimulus separated from more generally fiscally responsible measures and treated as a one-time emergency measure that does not require offsets.
With that out of the way, exactly how does NOT borrowing money put more money into "the top few people owning even more and driving up the value of their assets" pockets? It is rather funny that its actually the exact opposite but I won't delve into that because I can't wait to hear your explanation of this. Sorry if you have already posted it, you should know by now that I don't read every single post here, just point me to the post number if you don't mind.
And I can't remember if I have answered it, but I'll repeat something I've discussed - wealth has a couple aspects, static and dynamic. At a moment in time there is a fixed distribution of wealth; the top 1% might own 5% or 50% of wealth in society. On the other, the size of the pie changes, the income distribution changes.
The status quo for 30 years has been that about all economic growth in the US after inflation has gone to the top 20%, mostly to the very top bit of that 20%, and without any changes, that continues. The housing bubble is greatly depleting wealth from the middle class - which leaves it with a smaller share of all wealth, leaving it poorer compared to the most rich who have skyrocketed their wealth.
The stimulus stimulates the economy while the consumer and business spending are greatly reduced - helping largely the poor and middle classes.
Not having that stimulus impacts them the most, moving us closer to the third-world economic inequality.
No stimulus tends to lead to long-term economic crash, in a spiral, with closing businesses causing worsening to the economy causing more closing businesses and so on.
Stimulus should be grass-roots up, and when it is, the lower and middle classes tend to benefit especially. Does that help with why even a borrowed stimulus can help?
Anyway, I believe the posters point was that there is a finite amount of money to be borrowed and if the .gov borrows almost all of the money that people are willing to lend in a given time period that leaves little left for private business to borrow. I am not arguing the validity of the point I think he was trying to make but it makes a hellofa lot more sense than yours. Fortunately, the .gov can just raise the leverage limits on the banks and we will have plenty of money to loan, what could possibly go wrong?
I suspect you don't understand how the economy works much, why we need the government providing some stimulus aimed at supporting the economy. Remember the great depression (from books)? When you had some of the riches people explode in wealth by getting to buy up resources at pennies on the dollar from those suffering great losses? That wasn't 'good for the economy'. The government having programs to 'stimulate the economy' by hiring the public did help. With unemployment going up to 25%, these programs kept people from starving on the street (as much) and preserved some of the economy from just being wiped out as people could spend. The private sector being able to borrow wasn't enough to save the economy. How would they pay the loans back without any consumers spending?
You say things that would make some sense with the limited economic issues you account for, but IMO, are wrong because you don't understand other economic issues.
I do agree with part of what you said - the limit of available credit, and the danger of when it's used up.
Many liberal economists - who often support a larger stimulus - have said they're concerned the inadequate stimulus can use up our credit without doing enough and leave the country facing further crashing without the credit to help. That's a problem with 'halfway comrpomise measures' based on politics and not on economics. And then everyone can point the fingers to their political enemies why it didn't work. "Too much!" "Not enough!"
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