Multiplier

If common sense is so common, how come no one thought of it before?

A genius is one who sees where others do not look.

   The concept of the multiplier effect only took hold in the 1930s -- some 80 years ago -- in the lifetime of many now living. Yet it's now accepted in economics as "common sense."
   Here's an example: The Haynes Kayak Co. gets an order for 100 additional boats. This requires that the company hire one more worker, who in turn spends his wages on food, clothing, shelter, etc. To get to work, he buys a car, which means more gasoline sales. More auto sales in turn generate additional income for the car sales representative, support staff including secretary, bookkeeper and mechanic, as well as gas station employes, truckers who deliver the fuel, drillers, refinery workers, engineers who operate the oil wells, and those who benefit from their additional income.
   It matters not whether the additional first order came from government or from the private sector. The effect of multiplying benefits through the entire economy is the same.