I guess I either don't understand your analogy , or I am in disagreement with your above thought regarding. One of the best way to simulate the economy is to invest in rebuilding our infrastructure. - everyone from engineers to steel workers to the men that paint the yellow lines on the road are employed.
Hi scootrd, let me explain:
You always must ask, "who pays for it?". Remember that the federal government has no money and creates nothing of value.
Say it will cost one billion dollars to build that infrastructure, then that is one billion dollars that must be taken from the private economy. What things then will not get built in the private sector because of that loss of capital? Unless the government is more efficient than the private economy, which they are not even close, then more jobs will be lost than they will create. It has been estimated that 1 1/2 to 6 jobs are lost in the private sector for each government job. That is why the trillions spent on stimulus has resulted in no improvement in employment. All it has done is give us an insurmountable debt.
The size of government matters too. As the number of government positions increases, their pay and cost of operation must come out of the private economy. That is why our standard of living has been going down for quite some time. The private economy supports itself, but the government must also be supported by the private economy. A most prosperous position would be to have no government. But most believe that government is necessary to to protect our rights and the rule of law. Things done by the government since the constitutional times are add-ons by the government and weigh on the overall economy. Government will by nature grow in size and power which means a loss of prosperity and liberty to the people. During the time before the constitution, when we had no central government, we prospered perhaps better than the period immediately afterwards.
The above is an economic principle going back to the 1800's; Bastiat and the "broken window fallacy". Most people look at the seen, but you must look in the other direction to the unseen. You see the men working on the highway, but it is hard to see the factory or business that did not get built and the people now not employed there.
http://www.youtube.com/watch?v=QG4jhlPLVVs&feature=player_embedded
