Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

In the actual actual economy, the magic castle buys almost half of the Treasury bonds issued by the government; and when you give free money to people who can't meet all their basic needs, they spend all of it, which causes a cascade throughout the economy of taxable transactions, which reimburses the government for most if not all of the money it laid out.


Yes, that's why people who harp about debt-to-GDP ratio are usually ignorant of the fiscal multiplier. That said not all spending is the same. Spending on reforms or infrastructure that people benefit from (so things that help to make structural changes in the economy eg. by decreasing income inequality) has a large fiscal multiplier, spending on yet another useless thing (let's say paying Amazon - by giving it a tax break - to move its HQ from A to B) does nothing.




Consider applying for YC's Fall 2025 batch! Applications are open till Aug 4

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: