Written by: Ricky Tracy
Peter Schiff, who is running in the Republican primary for US Senate in Connecticut, just put out a good editorial on the Democrat’s next planned stimulus package “jobs bill.”
Schiff points out the noted “crowd out effect” that you may have learned about if you’ve taken a macroecon course.
Basically, there is only a limited amount of money that people in an economy are putting out to lend (just like there are only so many houses or cars on sale). The more the government runs a deficit, and has to borrow, the less lendable money there is to go around for everyone else.
