When you’re not an economist (I’m not), you have to seek wisdom everywhere. Here’s some from a very old movie: We’re in a small town during the depression. No one’s spending money. No one has money. Two guys drive up to the local hotel and hand a bag full of cash to the clerk to put into the hotel safe. The hotel owner can’t resist the temptation to take the cash and pay off local creditors who are pressing him. the men in sunglasses announce they are leaving tomorrow, and the hotel owner switches to panic mode. Life is over if he doesn’t come up with cash by tomorrow. He visits people who owe him money, and they are able to pay him now, because he paid off their creditors the day before. He is able to replenish the bag in the nick of time. The men and the bag depart, but they leave behind an improved economy. People have money and they are spending it. The original stimulus is gone, but the thought of it lingers. People have confidence that there is money in the system.
Many years after seeing this movie, I worked on a project to build a controller for a pump. The controller was sensitive to the integral of the inflow pressure and varied the pump speed to keep this pressure close to zero. If you took water out of the inflow tank, the pump gradually slowed down. If you added water, it sped up. If you think of this model as the economy, and the water as cash, the only way to speed up the system is to add more cash. If you add too much, water spews out the top and gets everything wet. That’s inflation. The only entity capable of adding cash to the U.S. economy in a meaningful way is the government. Private business won’t do that, because there’s no prospect of a return on the investment. If the government adds too much cash, there is a risk of inflation. The precaution is to increase taxes on the rich to finance the program and adjust those taxes as needed to keep the cash flowing but inflation in check.
The Federal Reserve tries to do this in a token way. By increasing interest rates, they discourage private business from borrowing (and spending) money as a way of tamping down inflation. However, ony the government can spend significant amounts of money without thinking about return on investment. Think instead about repairing bridges and highways. Think about building out mass transit. Money for these projects goes to workers who pay taxes and spend money on other things that generate more taxes. Eventually, the money comes back, hopefully before the guys with sunglasses look for their black bag.