How can government spending can trigger a chain of events that helps to improve the economy?

Question

How can government spending can trigger a chain of events that helps to improve the economy?

Answer 1

It can't

Answer 2

It depends on whether that spending adds any real value. Just digging a hole and then filling it up may spend money, but it adds no value. If it did, we could make ourselves extremely prosperous by digging a lot of holes.

The unfortunate thing about government spending is that it doesn't often add more value than what taxpayers would do with that money otherwise. Someone has to pay for that hole.

Seventy years ago, Keynesian economists advanced the notion that taxing or borrowing money and using it for worthless holes, "unlocked" idle funds. I don't think there are a lot of "idle" funds around the world these days.

Answer 3

It can't because in order for the government to have money to spend they first have to take it from the people in the form of increased taxes which therefore defeats the purpose of trying to improve the economy. If the people don't have money to spend in the first place paying more taxes will not help. It will only make the problem worse.

Answer 4

Uncle Sam Employs 1 person to dig a ditch for a specific wage and another person to fill the ditch for a specific wage. Those two people then turn around and buy a house, car, food for the table, etc. That then creates a Housing Industry which has to employ people to build homes, lumber mills to hire people to saw down trees, auto companies to make trucks to transport the wood, and so on....