Since then Days of Franklin Delano Roosevelt  the Democrat parties way to fix a down economy has been a two fold process.  The first is to increase government spending on infrastructure ...  Even if we don't need it. The Second is to cut taxes on the working class.

There are two ways to fund.  The government can just print the money to pay for the new government employees and the materials they need to build the infrastructure.  But that soon produces lots of inflation. It is described as more money chasing the same amount of goods and services. If these workers had been hired by private company that produces something for sale, it would be more money chasing more goods and services.. and that is not inflationary.

 But what if they just increase taxes on citizens .. such as the Rich, to pay for it?  Well what can Rich do with their money?  They can save it, spend it, or use it to pay taxes.  What if they save it?  Saving is just loaning your money to a bank who will pay you interest on your money.  How can a bank survive by paying rich people interest to store their money?  They don't store the money. They loan it to other people at an interest rate higher than they paid the depositor.

Did you ever hear of anyone borrowing money for some other reason that to spend it? The borrower spends the money for some good or service. And someone has to make that good or provide the service.  But what if the Rich person just spends the money?  Someone has to make the good or provide the service for the Rich person.

So when the Government taxes the rich to create jobs, it gets as many people fired as it hires. The only difference is the people that now have the jobs are working for the government.

What happens when the government gives tax cuts to working class people. They supposedly take the money and buy stuff putting other Americans to work. It is the trickle up theory. But what happens if the government taxes the Rich to give tax breaks to the Poor.  The working class gets more money to spend but people that were making stuff for the Rich get laid off.

But in today's world what will the working class people do with their money in a down economy. Look at the companies doing well in this down turned economy. Walmart is having record sales and profits. People that used to buy clothes at higher priced stores are now buying the cheap stuff at Walmart. But where does Walmart get its cheap stuff?  You guessed it China, Asia in general and some from Mexico.

Giving money to the working class will create jobs.. that is a certainty.. They just won't be created in the USA.

Understanding what deficit spending does to everyone's income  is important. When the government spends money it does not have, it has two options.. It can borrow it or just print it,  What happens if it just borrows the money?  Well all saved money gets borrowed or those who pay for money deposits go broke.  Think about it. If a bank accepts deposits it must lend the money to survive. The difference between the interest it pays for deposits and the interest it earns on loans pays the expenses and hopefully provides a profit. They must loan the deposited  money to survive.

When the government borrows money that is money that the private sector cannot borrow. In other words when the government borrows money to pay extended unemployment benefits to Joe, there is no job for Joe at XYZ Company  because the government borrowed the money that XYZ would have borrowed to hire Joe. Many companies borrow money because they have to pay employees and suppliers before they get paid for the product. More successful companies  often put profits aside to use to pay for labor and materials, but that is hard for an expanding companies to do. Companies only get paid for their product after they have made  and shipped then to the customer.

When the government prints money it increases the supply of money with out a corresponding increase in the amount of goods and services. That is the primary creator of inflation.

When government attempts to get the economy running better it has unintended side effects. Taxing costs one worker a job in order to give it to another.  That is a zero sum game. The other is to create inflation, which is a way of saying prices go up to as a result of printing money for those to be hired.   Prices go up and the amount a person can buy with a paycheck goes down. 

The most effective thing government can do to fix a bad economy is cut regulations, reduce government reporting and in effect get out of the private sectors way. That is something governments find very hard to do.