Monday, July 18, 2011

Economic Myths: Gov Spending Helps the Economy

Milton Friedman explains the silliness of one of the most persistent economic fallacies of the left; that government spending is good simply because those who get paid by government, then spend their earnings in the economy. As Friedman explains, real production has not changed; we have only reallocated it. And real production is what matters in an economy. Consumption is simply a way to allocate real production.

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