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How A STIMULUS works

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posted on Dec, 10 2011 @ 01:50 AM
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Originally posted by timetothink
reply to post by TsukiLunar
 


You are not understanding the definition of public....


No, you are not understanding the definition of oversimplification and misleading.




posted on Dec, 10 2011 @ 02:05 AM
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reply to post by TsukiLunar
 



Stimulus goes to the public because the public are the people whether it goes thru a "program" 1st doesn't matter...it is still fake money going around and around not accomplishing anything.



posted on Dec, 10 2011 @ 09:01 AM
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Dear OP,

From your post, it is OBVIOUS that you do not know what payment of debts is, let alone stimulus.

Using your own analogy, I will make it even simplier for you to comprehend in the real world context.

1. When the hotel owner owner has the $100 in his hands, he keeps it in the drawer. If the tourist don't like the rooms, he gets it back. If he likes the room, the owner keeps the money, and charges him in full when the tourist leaves.

Then only can he use those money to pay off debts or more critically, his overheads such as salaries and utilities.

With those repayments, he has no worries till the end of the month, where the cycle repeats, for everyone whom had touched that money paid - the workers, utilities companies and workers, banks and workers, etc.

This is what the stimulus does - to get money circulated and enriching everyone along the way.

Imagine if the reverse happens - no tourist comes along. The hotel owner's overhead bills remain. As he earns nothing, he can't pay salaries, bank debt or utilities. He then closes down. The workers become jobless. The banks left with a hotel no one has the money to buy. Bank workers retrenched. Utitility companies...etc, etc - cycle of doom.

2. Where does the tourist money come from?

Being a tourist, he came from another land, that has mineral resources that were mined and worked out, and sold translating into wealth for people in his country and thus he has the money.

In the case of gov funds, it comes from gov revenues, that are instead of being saved or hoarded, are given out to the citizens in the form of public infrastructure job creations and social services - education, healthcare, etc.

3. In the end, where does the money goes?

In the end of the circulation, it returns back to the gov as tax revenues, or it gets hoarded up privately as savings. In the gov's hands, it will rightfully go into social expenditure, recirculated to generate further wealth as its economy extends to the world and increases market share due to demand of the services of its companies can produce.

BUT if it is hoarded up, then it does none any good, for it is not circulated or generating wealth. Olden day banks use it as loans to others to generate interest returns, but today, far more sinister and greedy use of it by banks can be openly viewed now.

Hope it helps for your better comprehension.



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