[loveandrage]

Does it really make a difference to an economy whether tax-payer money gets spent by tax-payers, by huge corporations, or by the government? None of those groups would sit on the money, so what difference does it really make? How does one make the economy stronger (economic stimulus) and another not?

I've heard the "cut taxes" pitch forever, i assume because it helps win elections. But where's the beef? Can anyone prove it, or at least explain the theory. I cannot suspend the belief that it's bullshit much longer ....

[TreeFarmer]

Well anymore it seems to be debt that is being spent, not the kind of money backed by an actual real asset.

As for Govt spending versus private spending I believe economic theory says that the multiplier for govt spending is 1 less than that of private spending.

But, that does not matter because most of the spending is borrowed money or to put it bluntly, spending what we don't (and most likely never will) have.

TF

[Falconoffury]

The money trickles down to the middle and lower classes at differing amounts depending on who gets it. For example General Motors needs 25 billion dollars to hold onto over a million jobs. Citigroup needs 300 billion dollars to hold onto 300,000 jobs. Google doesn't need a bailout, but they only employ about 6000 people worldwide.

Banks generally don't employ anywhere near the amounts that manufacturers employ, so most of the bailout money isn't going toward preserving jobs. Unfortunately, banks control the system of payments and credit on which virtually businesses depend.