PAE

John Edmundson JWE21 at SPAMstudent.canterbury.ac.nz
Thu Oct 5 01:18:13 MDT 2000



Tom O'Lincoln wrote:
Well the conventional view is that deficit spending can
TEMPORARILY stimulate demand. For example, you put people in
uniform, they have more money to spend, the shops make more
sales, etc etc.

Me:
But deficit spending and PAE are not the same thing. Deficit
spending is about the government borrowing in order to spend. The
spending may or may not be on arms. Deficit spending I don't
doubt, can pump-prime the economy, bringing about temporary
recovery without solving the underlying problems. Arms spending is
 a non-productive use of the money obtained. By treating deficit
spending and arms expenditure as identical you are conflating two
quite different things.
Cheers,
John E






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