Hello, I am just reading about this keynesian multiplier effect in an econ book, and TBH it seems like complete BS. Let's not focus on how stupid it sounds that by forcing you to spend and buy crap an economy is going to get better, but on the "fundamentals" of the theory. And I am sorry if I don't understand this argument (so please someone fix this up if I am wrong). 1) Anyway my problem with the multiplier effect is that the money has to be first taxed from people before it can be spent. And after it's spent you start counting how many times it "ripples". But money by default circulates, so it would have circulated/multiplied regardless of government taxing and spending it. Why is the "average" multiplier not taken out of the after public spending multiplier? 2) It states that the money and thus GDP multiplies always only on spent money. But WTF, invested money does circulate too... To see failure in this, what could be one place you invest into... how about govt bonds! So if invested money doesn't multiply that is actually a logical paradox. In order to create the multiplier you have to invest to government, but at the same time cannot invest? 3) Of course if you increase demand, prices have to raise, and those price rises will affect the producers too, so why would they produce any more? Sure short term the prices may lag, but this kind of thing will also create all kinds of distortions without doubt. Not to take into account the uselessly spent money and resources. So in short, to my eyes this theory seems totally bankrupt, especially the 2) Paradox seems inevitable. Or does the theory consider savings as something you put into sock? Anyway maybe I am totally wrong, let's discuss about the keynesian multiplier (BTW I am not sure if it originated from keynes).