Stupidest and most intellectually dishonest thanktanks and magazines alive...

Brian Reidl:

Obama’s Faith-Based Economics: The idea that government spending creates jobs makes sense only if you never ask where the government got the money. It didn’t fall from the sky. The only way Congress can inject spending into the economy is by first taxing or borrowing it out of the economy.[1] No new demand is created; it’s a zero-sum transfer of existing demand...

What Brian Riedl doesn't seem to realize is that the only way he can get extra money to spend is by borrowing it or selling his assets. In either case, the person he borrowed it from or sold his assets to no longer has the money to spend--and so by Reidl's "logic" any private-sector decision to spend more (or less!) money doesn't create (or destroy!) demand: "it's [just] a zero-sum transfer of existing demand." According to Reidl's logic, no private decision to spend more or less can ever change the flow of existing demand: spending in the economy must always be a constant.

You have only to look at employment in America to understand that the claim that spending in the American economy is always a constant is simply and completely false:

According to Reidl's logic, none of these fluctuations in the employment-to-population ratio ever happened. He and his ignorant cohorts just close their eyes, plug their ears, and the more literate and well-read of them say: "Say! Bastiat! Say! Bastiat! Say! Bastiat!"

If we move from the fantasy-land of ignorant partisan hacks into the real world in which we live, the fact that economic actors get the cash they spend by selling their assets to others, borrowing from others, or taxing others does not mean that every decision to spend creates "no new demand... [is] a zero-sum transfer of existing demand..." Reidl's claim would be true if we lived in a pure cash-in-advance economy with a rigid technological velocity constraint--if the only way you could buy things was by paying cash on the barrelhead immediately, if you could only spend your cash once every "market day," and if you were forced on pain of confiscation to spend your cash every "market day." But we don't live in such an economy. We never lived in such an economy. Even Gyges King of Lydia, inventor of coinage, did not live in such an economy.

And since we don't live in a pure cash-in-advance economy with a rigid technological velocity constraint, everyone's decisions to spend more or less contribute to or subtract from the flow of demand--and the government's decisions to spend more or less are just as good as anyone else's, for it is just another economic actor (albeit a rather large one).

This is a first-day-of-econ-1 mistake...

[1] It can also get it by printing money--but that's not the issue here.