Multiplier Effect definition
The American Heritage -- New Dictionary of Cultural Literacy, Third Edition
An effect in economics in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. For example, if a corporation builds a factory, it will employ construction workers and their suppliers as well as those who work in the factory. Indirectly, the new factory will stimulate employment in laundries, restaurants, and service industries in the factory's vicinity.
Well that's only common sense. People with Jobs, buy more things, than people without Jobs.
Multiplier effect
by bolsh advogato.org -- Jun 6, 2005
If you buy a shirt for $30, the shop owner uses that money to pay wages, buy groceries. So out of your $30 maybe $20 recirculates into the economy, and then that gets respent. Typically your $30 purchase is worth about $60 to the economy.
Imports are dead money. It's money that is getting taken out of the economy. 100% of the money is going out of the economy. When you buy an imported product in the supermarket, then a lot of what you pay is going to the importer, and from there going out of the country.
That's basic economics 101.
Think of that extra Twenty Dollar Bill in your wallet, if you put it under your mattress, its effect on the current Economy is negligible. If you spend it, in your local shops and stores, and farmers markets and fruit stands -- well that Twenty Dollar Bill, begins to take on a life of its own. It begins to effect things, it becomes somebody else's opportunity.
If that Twenty Dollar Bill ends up in Circulation, it adds its push to the entire force of the Economy -- helping that Economy to move forward -- or alternately stall and retreat (as happens, when the majority of us decide to clutch those Twenties, like so many precious pearls.)
Tax Cuts don't Create Jobs -- People having money to spend on American-made product creates Jobs.
People having Jobs, in the first place -- Creates Jobs -- NOT reforming the Tax Code (unless of course, your job is Tax Accountant, or Lobbyist, or John Boehner's Bartender.)
Do Tax Cuts Create Jobs?
Peter Cohan, Contributor, Forbes.com -- 5/03/2011
It’s a mainstay of conservative orthodoxy that tax cuts create jobs. In fact, the complexity of the tax code does create jobs for high-priced tax attorneys and accountants. But do tax cuts create “real” jobs?
The answer appears to be no for companies big and small. After all, U.S. public companies pay well-below the official 35% tax rate while 13.5 million American workers search unsuccessfully for jobs. And start-ups tell me that tax cuts don’t affect whether they’ll create new jobs. In short, the tax cut rhetoric, while effective politics, is lousy economics.
That's Amazing. Even Forbes concedes 'Tax cuts don't create “real” jobs'.
You wouldn't know that from watching the Traditional Media -- where it's simply taken as an article of faith:
That the more Tax Cuts, and now the simpler Tax Code, the more it will theoretically put People back to work ...
-- despite all concrete evidence to the contrary. Seems like we ran that experiment last Decade, did we not?
What will create Jobs, is applying that "Multiplier Effect" tool smartly ... to make more People, participants in the Economic slipstream ...
Extending Bush Tax Cuts WON'T Create Jobs, Says Leading Economist
Laura Bassett, HuffingtonPost - Jul 28, 2010
As Congress debates whether to extend Bush-era tax cuts for the wealthiest Americans at least one prominent U.S. economist has already cast his negative vote.
"Not all budgetary dollars are created equal," said Alan Blinder, professor and co-director of Princeton University's Center for Economic Policy Studies, in a conference Wednesday morning. "Some have a lot of bang for the buck, and some have very little.
The GDP increase per dollar of budgetary cost is in the range of 1.6, 1.7 for things like food stamps and unemployment benefits, and in the range of .35 for extending the Bush tax cuts.
We could get some substantial job creation by simply reprogramming the $75 billion that would be saved over the next two years by not extending the upper-bracket Bush tax cuts and spending it instead on unemployment benefits, food stamps, and the like."
Bottom up Investments: Unemployment benefits, food stamps, hiring people to fix roads and bridges and schools (SMART! extra $1.70 return on each Dollar Invested.)
Top down Investments: giving even more Tax Cuts to those uncertain Job Creators (DUMB! with only $0.35 Economic return on each Dollar Invested.)
Multiply THAT. Contractionary Republicans.
Invest a Billion Dollars in Bottom up Investments, like in the American Jobs Bill, and get 1.7 Billion in Economic Growth, as local workers, spend their paychecks in local shops.
Invest a Billion Dollars in Top down schemes, like in the latest Boehner Tax Code plan, and get 0.35 Billion in Economic Contraction, as even more Corporations and more Millionaires, put even more of their Windfall Money under their big fluffy Mattresses -- or worse yet, take their new windfalls, and transplant it into businesses somewhere overseas. There's nothing to stop them. There goes our circulation.
Tax Cuts despite the GOP myths that surround them, haven't been spurring US Economic activity.
And those Tax Cuts, no way, no how, will ever spur the repair of our public roads, bridges, schools, water lines, sewer systems, and power grid revamping. That type of Growth, well, it takes a Nation.
Factor that, you Grover ditto-heads.