Maggie's Farm

The points you make about the Ukraine are accurate, but remember building weapons is 'productive' (in a very bizarre sense, but if a feeling of security knowing you can obliterate and be obliterated is a sense of security...then it has value and is productive because it keeps you focused on being productive rather than worried about being attacked).

So I would discount weapons manufacture as non-productive and put it in the 'productive' category (though clearly we'd all be better if it didn't exist in a Utopian world).

On the other hand, non-productive activity is not beneficial, even during a down cycle, because it is misallocated funds. During a down cycle, the point is for savings to increase and debt to be destroyed. This improves conditions for future investment.

If, instead, the government were to 'move forward' expenditures, then the conditions for future investment never get created, and future needs will already be addressed, and over time the downturn becomes much worse.

Alternatively, if the government prints money and buries it, and tells people to go dig it up, this will only lead to inflation, not growth or debt destruction.
Productive investment grows the market, which means there are more opportunities for money to 'go somewhere', aside from the current 'known' economy and into the 'newer' sections of the economy. Digging up money doesn't grow the market. Nor does building a Death Star to avoid a non-existent alien threat. All we're left with is a bunch of people with cash from building the Death Star, more government debt, and a Death Star that does.....well, it does nothing for us. Unless we decide to resort to our colonial/imperialist ways and planet hop to 'take stuff by force'. Which, after building this Death Star we may still not have the capacity to do. But that's still not growth, just adding more assets.

The key to economic growth is always productive capacity and its utilization. PROPER utilization, some would argue, though I say the word proper is subjective. Krugman would say turning on an old Model T factory and making tons of cheap Model T's is productive. I'd argue it's not adding any value anywhere. In a way, it's destroying the value of people holding existing Model T's (not really, they are still antiques, but you get what I mean).

The best way to get the economy going, particularly in a time like now, is to relieve some of the pressures from regulation and ease up on minimum wage laws.

Wait and watch what happens in the areas that just raised minimum wage to $10+...the effects may be negligible if the minimum wage really SHOULD BE that high. Chances are this is too high, and we'll see some spikes in unemployment over the next few months.

Your description of the differences between the experiences of both the US and the UK is a good summary of how I feel. Basically, the US took a similar tack in 1921 as the UK did many years later - with similar 'better' results.

Thanks for the clarification.

That, my friend, is probably correct.

I agree.

What if, though, they just printed money and gave it to people for doing 'stuff'?

Technically, after inflation you're still stealing. But it's harder to notice.