quote:Originally posted by Jaguar:
What is happening to that money? It is being invested in other ventures, new business startups, further invenstment in large corporations etc, which creates what? Jobs, because as those companies get that injection of cash, from those NOW moving investments, they must CREATE something, and how do they do that? By HIRING workers.
[/QB]It does not necessarily mean they are going to hire new workers. If the products they make are not selling then there is no reason to hire new workers. In fact it would only lower their profits. They could buy more equipment/Capitol but again no reason to do this.
What drives the economy is consumer spending. So in the long run sure tax cuts can move the economy along it can be a long wait though.
So what "can" move the economy along faster? War
War does increase the demand for labor. Not, just in one sector, but in many sectors. A single company no longer produce's every part in their products. So when a company A see's greater demand for their product so do all the companies that company A outsources to.