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... creating new capabilities that did not exist before. It therefore exists entirely outside the semantic universe of Pareto Optimality, which is about distribution of a well understood, well known, and given amount of goods and services, and is incapable of comprehending social-entrepreneurial creation of new real value.

Also, with respect to:

And more, if this sort of "green stimlus" is going to have any effect on increasing consumption, it's going to have to be directed at those with lower incomes who will actually spend the money instead of of putting it into a Swiss Bank (thought I hear that Lichenstein is the new Switzerland....)

In the round, it increases income, because when governments order goods and services in the middle of a recession, producers fulfill those orders. It then is distributed as earnings primarily to wage and salary incomes, since profit earnings are low in the middle of a recession.

Tax cuts depend on consumption spending for their stimulus in the first round, as well as in later rounds ... government spending only requires consumption spending in the second round and later effects. The immediate income and employment impact is not subject to being undermined by dropping propensities to consume.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Oct 12th, 2008 at 06:08:51 PM EST
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