Politics and World Government

Multiplier effect of jewelry sales: taxes collected pay the entire cost?
Re: "Surrogates gone wild" -- cyanidefreak Post Reply Top of the thread Forum
Posted by: DWA
08/01/2008, 16:22:24

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Recently at a big box store, I saw that they had their jewelry marked down 70%.

Naturally, if the stimulus checks are spent on such high markup items, then the profits are rapidly recycled into the business economy, and other people have more money to spend.

If the otherwise-fired jewelry counter clerk then goes and spends their paycheck, that has further multiplier implications.

A large portion of the money spent at retail does not go to the original supplier. The average wheat farmer gets only pennies out of a loaf of bread sold.

Summary: A lot of jewelry counter credit card machines can whirl with practically no inflationary consumption of scarce resources. Taxes will be collected on many of these transactions. Maybe in ideal situations, "government" will actually break even, if there otherwise would not have been any economic activity. But, will the "stimulus" work indefinitely, and will the mule that picks up the slack (who?, taxpayer?) eventually balk?

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