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Economic Fallacies (Continued) I previously asked the questions: 'what stimulates the economy?' and 'what causes the economy to slow down?' There are a number of factors, some of them only dimly understood by economists. One factor is simply mood. It's acknowledged that in some countries winning a prestigious sporting event, such as world cup, can stimulate spending. When people feel good they spend. It's worth noting that we talk about an economic climate - good weather equals a good economy, bad weather equals a bad economy. The two are related by the mood. Another factor, that isn't understood at all in the West, is astrological influences and I've mentioned before how this works ('Energy Currents and Ley Lines'). I mentioned that if government spending is fueled by dept this can be counterproductive. This is not only when the government prints money. The same result is produced when individuals borrow money to spend, as this also has the effect of increasing the amount of money in circulation. This is what happens when interest rates are lowered, which is the situation in many countries at present, as sooner or later the dept that is built up has to be paid back. Economic theory says that the borrowed money is an investment that is used to produce more goods, but that depends on what the borrowed money is spent on. It's no use a company borrowing money from the bank in the form of a business loan and then spending it on booze. Another factor to consider is that money injected into the economy for very high-tech enterprises has a high 'flow on' factor. Consider money spent on building sophisticated airplanes This uses a host of electronic equipment, computer software and research. Electronic equipment requires employing technical people and parts which are purchased from other companies, and they use components that are, in turn, produced by others, etc. Compare this with money spent on social services which is largely spent on basic produce and has very little flow on. The US government understands this which is why they spend a lot (more than they can actually afford) on high tech arms. It's also why they think that starting a war will stimulate the economy. So when we divide the economic pie it makes a huge difference to the economy on whether we spend it on arms or social services.