Thursday, July 14, 2011

Elasticity of government purchases


Political polls almost always have bad sampling because a vote in Kentucky is a different thing than a vote in California, due to the mal-representation in the Senate.  However, this question seems generic enough to overcome regional biases.
What is the elasticity of government goods?   

A dollar rise in the price results in two dollars less purchased. Hence my point. Norquist wants lower taxes because his people make a living off of government goods. Billy Kristol and Eric Cantor have the same problem, they need to lower taxes to get more  government defense goodies. They are not quite Keynesian, because they always believe this, there is no cycle,  it is Stalinism actually, command and control from the center that  they love.
Eric and Billy want to continue the military build up on the back of a future debt crisis. The whole paradox is that the 9/11 belt bombers were funded by Bush family friends in Arabia!

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