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US Government support of various industries and their differing Multiplier effects.


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2011 Feb 6, 10:37am   1,438 views  1 comment

by American in Japan   ➕follow (1)   💰tip   ignore  

Of course if the government spends money for a particular industry, it will have some positive effect on the industry which gets the aid. There is the downside in that the money comes out taxpayers discretionary income. But not all industries are equal and for each dollar spent in one industry the effect may be minimal (ie. no net gain or possible even a negative net gain). Other industries, have a much greater multiplier effect as one company is tied to multiple companies (auto industry).

Table II-3. Industry Multipliers (1999) is interesting:
http://www.bis.doc.gov/defenseindustrialbaseprograms/osies/defmarketresearchrpts/texreport_ch2.html

I found this one for what it is worth:
http://richaje.livejournal.com/8158.html

Here is an overview on Wikiepdia:
http://en.wikipedia.org/wiki/Fiscal_multiplier

Are there any other data which posters have found on this?

I think this is important as politicians and people in support of government funding various industries (including the military) argue it creates jobs but...

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1   American in Japan   2011 Apr 5, 1:34pm  

This multiplier effect is something to consider when people say that supporting a particuler industry will "create jobs".

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