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View Diary: The part of Obamacare no one is discussing (23 comments)

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  •  OK, this is what I was talking about (0+ / 0-)
    That means that dollars going to people who spend them on those plain ole ordinary necessities of life circulate faster and have a more "multiplied" stimulative effect in the economy than dollars that go to insurance company execs to sit in the bank until they decide to buy another Bentley for dear little Buffy, or for military planners to buy another aircraft carrier that we don't need.
    Presumably there is going to be a goodly number of people "joining the system" and having their $$s funneled to the insurance execs and thus having less stimulative effects than if they were spent on every day items.

    My query, which you jumped all over, was merely to inquire how much this was going to be, compared to $$s going in the other direction (i.e., from those people who were going to pay less for their premiums and thus have their $$s funneled away from the insurance execs' pockets).

    Seriously, one cannot have it both ways!

    •  well, it's pretty simple (0+ / 0-)

      Purchases of consumer goods have a higher multiplier than purchases of luxury goods.

      The money people save on insurance will go to consumer goods, which has a higher multiplier than money that goes to insurance execs for luxury goods.

      It's not the amount of dollars that makes the difference (it's the exact same amount of dollars in either case)--it's the speed at which those dollars circulate.  Higher speed equals more multiplier equals more stimulus.

      If we cut the money spent on shoes and spend it on beans instead, it wouldn't make much difference.  But if we cut the money spent on insurance or yachts and spend it on hot dogs or phone bills instead, those have a higher multiplier, and it stimulates the economy more by moving dollars faster.

      Economics 101.

      •  Yeah sure, but again, in light of all of that (0+ / 0-)

        what is your objection to my initial post, above?

        You seem to be making exactly the same point that I was (which at the time was portrayed as me not having even the most fundamental understanding of the economy).

        •  your initial post does not say what you are now (0+ / 0-)

          saying.

          Your initial post asserted that spending dollars on health insurance was a BRAKE on the economy.  It cannot possibly be.  Any dollar spent, on anything at all, fuels the economy. Spending dollars cannot EVER slow the economy--only NOT spending dollars can do that.

          It is entirely true that, as we are NOW discussing, some types of dollar-spending are more stimulative than other types. But that is an entirely different matter than asserting that some types of dollar-spending SLOW the economy.  That is simply impossible. Every dollar spent, no matter what it is spent on, is someone else's income, and expands the economy.

          •  The point was that according to this diarist (0+ / 0-)

            spending $$s on health insurance was for all intents and purposes taking them out of the economy.

            To me that implies that spending $$s that way * would * be a brake on the economy.

          •  Maybe the confusion is over the word "brake" (0+ / 0-)

            to me I was using it in comparison with not using a brake.

            For example, in one case in an analogy with driving, the automobile would be going 78 mph, in the other, with the brake applied, only 65 mph.

            So in both cases the car (or economy) would still be moving forward, but at different rates.  

            You seem to interpret that the "brake" idea means the economy would be actually moving backwards - that's not what I originally meant but once you raised the idea of funneling $$s into insurance company execs' pockets, even that seems plausible now.

            •  that was not clear (0+ / 0-)

              The diarist is arguing that more money in consumer pockets to spend on high-multiplier stuff is an economic stimulus. He is correct.

              IF you are arguing that more money spent on insurance because of new people in ACA is a lower stimulus than the high-multiplier consumer goods they would otherwise be buying, that would also be correct. (But trivial, since nearly EVERYTHING the government spends money for--everything from the military to museum--is a less effective stimulus multiplier than just giving money to people to buy food/clothing would be.)

              But it sounded like you were disputing the diarist's notion that more money for consumers is a stimulus, coupled with the idea that spending money on insurance would NOT be a stimulus. And that would be incorrect.

    •  you miss my original point, though (0+ / 0-)

      Any dollar spent, on anything, expands the economy. Spending dollars cannot ever "brake the economy"--only NOT spending dollars can do that.

      Some dollar-spending is indeed MORE stimulative than other dollar-spending and can expand it faster or slower than others, but it is not possible for dollar-spending to SLOW the economy, no matter what it is spent on. Every dollar spent, for whatever, is a dollar of income for someone else.

      •  In your example they could (0+ / 0-)
        Any dollar spent, on anything, expands the economy. Spending dollars cannot ever "brake the economy"
        which was "going into the pocket of a health insurance exec" which could lead them to being stashed offshore in a tax haven, etc.

        Maybe on a global level that would still stimulate the overall economy, but common sense says that would impede things here at home.  

        Similar the $1.7 trillion in cash that corporations are said to "be sitting on" is generally thought to be putting the brake on the economy (as compared to if it was used to generate 17 million new jobs, or that type of thing).

        •  you once again miss the point (0+ / 0-)

          You are once again arguing over the rate of stimulus produced by different multipliers.

          That is an entirely different question from dollar-spending producing a decrease in the economy. It can never do that.  Ever.  Dollar-spending ALWAYS increases the economy. It cannot ever decrease it.

          One can argue that spending money on beans increases the economy faster than spending it on insurance premiums does (and that would be entirely correct to argue). But one CANNOT argue that spending money on insurance produces NO stimulus and DECREASING the economy.  It cannot.  Ever.

      •  THAT btw, is why the goppers are full of shit when (0+ / 0-)

        they blither stupidly that government spending decreases the economy.  It cannot possibly do that.  Every dollar spent, by anyone for anything, increases the economy.  A dollar is a dollar is a dollar.  It doesn't matter who spends it or what they spend it on.  Spending dollars cannot EVER decrease the economy.

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