Give a poor man a dollar and he spends it immediately

I am not an economist but I know this principle works.  It’s basic cash flow.  Money in.  Money out.  Where it goes and whom it benefits.

Now, if you gave a million dollars in tax breaks to Warren Buffett he would take it and keep it in the bank.  He basically does not need another Million.  Plus he is not going to hire anybody to do anything for him because he doesn’t need the added service.

Like wise a business would take saved money from a possible tax cut and keep it in the bank or pay off outstanding debt.  Not hiring anyone because his or her service or product demand has not yet increased.  Why hire someone to build or manufacture something when the demand is not there.  So, put it in the bank.  And certainly as we all know the lack of demand is due to a very sluggish economy.  No cash flow.

Now, unlike any of the above scenarios, if tax money is spent on hiring a man or woman to repair roads, fix bridges, build high-speed rail, extend runways, and more, that in itself puts cash immediately into the economy.  Let me explain.  Again, it’s simple applied home economics.

For an example if you watch an out of work individual who has past due debt, needs food on the table, gas in the tank, has a car needing repair, has a mortgage and insurance to pay, dental work to be done, children’s college education to pay for, and then give him or her money for hired work almost immediately the cash goes quickly into the economy.  The grocer receives more cash.  The car repairman receives more money.  The local college receives more money.  And you see the flow of immediate cash.  Right?

Then after all the above transactions taxes are collected and that money goes to more street repair and helps hire more police and fire personnel.  See how that works?  It’s almost like a pyramid effect.  Flowing quickly to people who really need the cash flow.

And if that work and cash flow is sustained, money starts flowing up.  And the process that helps to flow up is demand.  Demand for more goods and services.  Thus allowing the larger companies to hire more workers because of product or service demand.  Then the above pyramid effect repeats itself again and again.  See how that works?

Look, I am not a genius.  It doesn’t take a genius to figure this simple principle out.  And, I am sorry to admit Congress is far far below genius level.  Not able to see this principle.  Basically ignoring it all together.  Congress is more intent on reelection politics and playing games with themselves.  Please ask your congressperson to read the economic policy reports.  It’s there.  It’s simple.  Money in.  Money out.  It’s will work.