can find new jobs for the unemployed that increase output, we win. If we cannot, we lose." Yes, but that doesn't necessarily mean that it has to be one to one in job and product. For example, the state funds a job guarantee that puts everyone willing to work busy doing something productive, such as happened in the CCC, WPA, TVA, etc, during GD1. That deficit expenditure increases the flow of NFA "on the way" through to its being saved as tsys, as Congress requires in the $-4-$ debt offset. This increases nominal aggregate demand, and business responds to increasing demand with increased investment. GDP rises. There is no problem with importing goods from Asia as long as the government realizes it has the ability to create simultaneous full employment in the US and that it can do so without either endangering its finances or generating inflation, the two bogeymen now preventing this. Martin Reply: December 9th, 2010 at 1:57 pm Neil, Sorry, I can trade other assets or my goods and services for other goods and services, the only thing I need dollars for is to pay my taxes. Also, I am talking about an increase in money, not a scarcity or money. Second, the reason that quantity adjustment is not considered (imediately) is because if I am running at full capacity at my car factory I cannot produce additional goods without building additional facilities, this takes time. The imediate response is an increase in price, the resulting response