Video clip titled "Reality Check" from The Rachel Maddow Show on February 5, 2009
The economy is in crisis because people aren‘t buying enough stuff. There is supply, right? People make stuff that is to be sold and then there‘s demand. Demand is buying.
Right now, there‘s not enough buying. So, what they teach you in the very easiest semester of the very easiest economics class, because it‘s really easy to understand even if you are a total dunderhead about more completed macroeconomics stuff, what they teach is that the government can turn around an economic crisis that‘s caused by not enough demand—by making demand. Stimulating demand, they call it—economic stimulus.
It is reality check time here. Economic stimulus, most efficiently, is government spending. The most purely stimulative spending would probably be just to give envelopes full of cash to the poorest people in the country. Statistically, they‘d be the most likely to spend it.
In the absence of a political reality, that would make something like that possible, an almost ideal strategy is government spending, say, on infrastructure of which the American Society of Civil Engineers just said we could use $2.2 trillion worth. It‘s good jobs that can‘t be outsourced, immediately, that have the long-term benefit of dragging our country into the 21st century in terms of our ability to compete economically with the rest of the world.
2 hours ago