Common Sense Capitalism
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We are at an economic crossroads.
The Federal Reserve has pumped over one trillion dollars into the economy. Producer prices have been falling as of late.
Economists have been debating whether the threat to the economy is deflation or inflation.
Between inflation and deflation, what do you think is the greatest threat to our economy?
We are at an economic crossroads.
The Federal Reserve has pumped over one trillion dollars into the economy. Producer prices have been falling as of late.
Economists have been debating whether the threat to the economy is deflation or inflation.
Between inflation and deflation, what do you think is the greatest threat to our economy?
none, miss information, speculation, lack of political will and greed are a much bigger threat. So what if the US gets inflation or deflation.. big deal. We are not talking hyperinflation or deflation after all, no economist has been talking about that.
As much as I hate wasteful spending by the government, one of the things that our government could to to end the recession would be to print up a bunch more money, and send every US citizen a big fat check. This will without a doubt increase consumption, thus stimulating hiring. It would also reduce debt defaults (thus helping out the banks). The trick is to figure out just how big those checks should be. Just common sense tells me that those checks have to be larger than a months average salary to really stimulate spending. Send a family of four $400 and they will probably just pay their utility bills on time instead of a month late. But send that same family $16,000 and they will do some serious spending. The worse case senerio is that government stimulous checks will force a little inflation into our system - which is a GOOD thing. The checks just need to be small enough that demand created by them does not exceed our full production capacity level. Think of these stimulous checks as a loan from the government which will be repaid by the taxpayer going back to work and once again generating a good income (and thus paying a good bit of income TAX).
The philosopher Herbert Spencer wrote, "‘The ultimate result of shielding man from the effects of folly is to people the world with fools." One problem with your "just send every US citizen a fat check" solution is it does nothing to address imbalances created by the bubble economy, and some of these imbalances are huge. The only way to temper the excessive risk-taking mentality that fuels these bubbles is to have what hedge fund manager Kyle Bass called a "Darwinian flush" in which the people who took on this risk are punished and brought back to reality. Besides, as the article I quoted mentioned, there comes a point at which more government "stimulus" actually becomes contractionary. Japan has been trying to spend its way to prosperity in the wake of a collapsed asset bubble by paying people to build bridges to nowhere and the deflation is still there, along with the big public debt bill. Also, the value of a fiat currency depends on confidence. If you kick the legs out from under savers by just "printing up a bunch of money" to save slugs who borrowed wheelbarrows of money to buy McMansions, the savers might just say, "Screw it. Next time I'm buying gold" and the value of the currency will plummet. Finding the right amount of stimulus without going beyond the tipping point is a tricky thing to pull off. It will be interesting to see how long confidence remains in the Japanese currency. We're seeing some hedge funds starting to make big bets against the yen, mainly because of Japan's deteriorating public finances.
Japan's biggest issue regarding a decade of flirting with deflation is the fact that savings remains high despite low interest rates and fiscal expansion.
First of all, before Japan's asset bubble popped, its "biggest issue regarding a decade of flirting with deflation"--the nation's high level of savings--didn't have a problem fueling an economy that experienced tremendous growth and was supposed to own America by now. Since Japan's public capital spending was targeted to domestic consumption, I can't really understand your reasoning as to why it hasn't been effective
Presumably, the people building bridges and roads to nowhere exist and are physically able to do the work.
I think a more likely explanation for the relative ineffectiveness of the spending is government is less efficient at allocating resources than the private economy.
Also, even though Japan has a large pool of savings, it has a huge government debt that, at about 200% of GDP, will still need to be repaid from those savings and which is siphoning money from the private economy.
The United States will confront some of the same headwinds the Japanese faced in the unwinding of their credit/asset bubble except that we have less savings and more total debt, with a public debt that's expanding at a frenetic pace.
Since this debt ultimately has to be repaid in the face of massive deflationary credit destruction, I think this will be a drag on our economy for years to come and will overwhelm any Keynesian attempt to prime the pump with government "stimulus" that would tend to support the bubble economy.
We'd be better off just leaving matters to the private economy to have its "Darwinian flush" so these assets can be redeployed to more productive use.
You really do not understand Keynesianism and to a lesser extent tidbits of monetarism. Fiscal stimulus depends entirely on inducing consumption, of which is an obsticle given increased rates of savings and an aging population.
(Japan's) government debt soared from 52% of GDP in 1989 to 184% today (Chart 2). The economic results: GDP in that country is no higher than it was 18 years ago; its employment is no higher than it was 19 years ago, and there is no inflation since consumer prices are at 1993 levels.
http://www.hoisingtonmgt.com/pdf/HIM2010Q1NP.pdf
But are they physically ready to save less of their wages? That is the central theme of which you have neglected to consider (which shows you know little about Keynes).
In order to make your point relevant, provide a solid source that depicts the breakdown of Japanese debt. If a large proportion is held internally (as i am sure it is), savings is not being siphoned off. You only export savings or GDP when debt is held externally.
Economists from David Ricardo (1772-1823) to John Maynard Keynes (1883 to 1946) to present day scholars have theorized about what this massive transfer of resources from the private to public sector does to overall economic conditions. Our read of history, economic theory, and mathematics leads us to one clear conclusion. The “taking” of funds by central governments to be redistributed to other priorities is, in the end, contractionary.
Viscerally, the normal reaction to a massive increase in government spending is to assume it is
an inflationary event, particularly in the U.S. where amounts have been so large over the past ten years (Chart 1). Has this huge spending shift from 18.4% of GDP in 2000 to 24.7% today made the U.S. more prosperous? The results are unequivocal. Inflation today is 1.3% versus 1.7% ten years ago (core PCE deflator.) The percent of the population working today is 58.6% while prior to the large budget deficit spending of the last ten years it was 64.6%. Our GDP was growing at 4.8% ten years ago, and today we are staggering out of recession.
http://www.hoisingtonmgt.com/pdf/HIM2010Q1NP.pdf
Apparently, the Japanese didn't understand Keynes, either, because they've spent the last twenty years running massive deficits in an attempt the reflate their economy. I don't think anyone can claim its been a success
Well, I know the Japanese were enamored of Keynes, but you don't have to convince me that Japan's version of Keynesian-style deficit spending was a failure. But let me ask you something. We've seen Americans increase their rate of savings recently (or at least jettison some of their debts). We also have millions of Baby Boomers who are beginning to retire and/or are attempting to increase their nest eggs, which haven't gone anywhere in ten years. Why would Keynesian-style deficit spending work in the U.S. when we have some of the same issues that Japan faces, except that we have households in hock up to their eyeballs?
I didn't say savings were being exported. I said the government debt would have to be repaid, which would siphon off savings from the private economy:
Care to address my points or spout out the same rhetoric from your previous post.
The US is the worlds largest consumer market, and we have a historical precedence for induced consumption.
Several months ago I rhetorically asked whether it was possible to get out of debt crisis by increasing debt. Yes – was the answer, but it was a qualified yes. Given that initial conditions were favorable – relative low debt as a % of GDP, with the ability to produce low/negative short-term policy rates and constructively direct fiscal deficit spending towards growth positive investments – a country could escape a debt deflation by creating more debt. But those countries are few – the U.S. among perhaps a handful that have that privilege, and investors, including PIMCO, have strong doubts about U.S. fiscal deficits leading to strong future growth rates.
PIMCO - Bill Gross June 2010 Investment Outlook
(W)hy on earth are you attempting to compare the economy of an export machine with that of the US, and then use it as a means to boldly state, "fiscal stimulus will always fail"?
And when this debt is repaid...... To "whom" is it paid to?
Some hedge funds are starting to wager on painful times ahead for Japan, the world's second-largest economy.
These investors, including some who made successful bets against risky mortgages and financial companies in recent years, anticipate trouble for Japan's financial system. Their concern: Government borrowing continues to climb while demand for the nation's debt could taper off.
A collapse of the Japanese government-bond market "is going to happen; it's a question of when," said Kyle Bass, head of Hayman Advisors LP, a Dallas hedge fund, who has placed wagers on that outcome. He and others, such as David Einhorn's Greenlight Capital Inc. and a fund run by Daniel Arbess of Perella Weinberg Partners LP, have been buying a variety of investments that could pay off if the Japanese bond market crumbles....
(B)ears maintain there are reasons to bet against Japan. They note that government debt as a percentage of gross domestic product is expected to hit 219% in 2009, up from 120% in 1998, according to the International Monetary Fund. By way of comparison, debt will total 85% of the U.S.'s GDP, and 69% of the U.K.'s, the IMF said. Even net government debt, which subtracts government assets, is high in Japan; the IMF puts it at 105% of GDP in 2009, compared with 58% for the U.S.
Some predict that as Japan ages, more people retire and savings rates dip, some purchasers will start pulling back on buying or even turn into sellers. Japan's public pension fund, the world's largest, has said it could become a net seller of holdings in 2010. About three-quarters of the fund's holdings have been in Japanese bonds.
"The biggest buyer is now a seller. That's the biggest difference today," said Mr. Bass of Hayman Advisors. To attract buyers, particularly from overseas, yields will have to rise significantly, the bears assert, making it painful for Japan to service its debt.
Hedge Funds Bet on Deep Trouble for Japan - WSJ.com
Well, I thought I did. You said Keynesian policies won't work in Japan because the country is populated with old people and savers. I said you're right, but it's too bad the Japanese didn't figure that out before they saddled the country with a huge debt.
Then you seem to think that spending money we don't have and transferring resources from private to public balance sheets, thereby increasing government's share of GDP, will help our economy.
I already pointed out that as we've piled on more debt and government spending has consumed a greater share of our GDP, especially over the last ten years, our economy has stagnated.
So I'm not exactly sure what points you want me to respond to. Tell me why the next ten years, at a time when we've experienced the collapse of asset bubbles around the world, will be different.
Maybe BObama and Congress will do a better job of setting spending priorities and allocating resources than the free market?
We didn't have historical precedence for consumption the last time our country had a huge debt to pay, i.e. during the 1930s.
We only had a propensity to consume as long as we had money to spend. In the aftermath of The Great Depression and WWII, we had a unionized work force that actually had discretionary income to spend and large pent-up demand from years of deprivation and rationing. Then consumer credit became widely available. Then we had women enter the work force in large numbers for the first time. Then we had asset bubbles in stocks and real estate that fueled consumption, since people treated their brokerage accounts and home equity as piggy banks to spend and/or borrow against. Then the balloons popped and the party ended, except that we were left with a huge debt hangover. Now, perhaps we don't have a shrinking population like Japan does, but we do have tens of millions of aging boomers set to retire over the next two decades, along with a "Shop 'till you drop" mentality that's left us stretched. So, I ask you, Sir, where are these consumers going to get the money to support all of the shopping centers and malls we built during the boom times when we thought 1950s ranch houses in gang-infested cities were worth $400, 000?
I thought PIMCO's Bill Gross had some interesting comments on the subject of debt in his latest Investment Outlook commentary
Where did I "boldly state" that? I think what I'm saying is we're in serious danger of falling into a period of significant deflation, and solving this problem by issuing more debt is not the solution. We're at the point at which we've built up huge inefficiencies in our economy with enterprises that can't seem to stand on their own without government support. And then, at the end of the day, we still have the bill.
Let's ask these guys:
During economic contractions where aggregate demand takes a serious negative shift, government spending can have a very positive impact (as you are seeing today).
Only to the extent that the money makes it's way into the hands of the consumer class, who then use that money to increase demand for production. When the money is just horded by the wealthy, it does absolutely nothing for our economy.
I suspect that the reason that the money that our gov pumped into our economy has not helped anymore than it has is because it was a top down distribution of money, not a bottom up distribution. Remember, money on "trickles" down. Our spendulous bill money was given to those at the top, who in turn basically just kept most of the money. Much of they money that was sent to the banks was either almost instantly repaid by the banks and never served it's purpose of being lent. The banks didn't want to make loans because with such a shakey economy every credit worthy customer was highly likely to become a non-credit worthy customer the next day. Companies didn't need to borrow the money to expand because with a lack on demand for their products they had no need to expand. Individuals didn't need to borrow the money because they didnt know if they would be able to pay it back.
The guys at the top hired very few consumer class type individuals and spent almost nothing on materials and services with that money. Companies that got money to develope althernate energy horded that money because they knew that their was no demand for alternate energy sources. Local and state governments that got spendulous money just used the money to fund projects that were already on the list to be funded. Demand continued to decline and thus, very few private sector jobs were created which is why we still have nearly 10% unemployment, 17% total unemployment or underemployment, and a 25% average reduction in work hours for those of us who are unemployed. I have not seen any specific figures on this, but based on the figures that I have seen, it is highly likely that well over 50% of families have experianced a reduction of income during the past two years. Go stand in front of the post office and ask the next 100 people who walk in if they are stuggling to pay their bills, I will bet that 80% or more would respond "yes". Then ask them if they have recieved any additional income or work opportunities due to the spendulous bill, I would bet that the vast majority would answer "no".
Now if we would have taken the same amount of money that was allocated to the spendulous bill, and distributed it equally to each individual each individual would have recieved a check for about $2,600. That's over $10k for a family of 4. It is also excluding all of the TARP money, individual corporate bail out funding, and all of the increases in misc government programs, etc. When you include all of that stuff the gov could have sent us all a check in excess of $5k - or over $20k for a family of 4. If each individual and family unit was allowed to directly spend our economic stimulous/bailout money in the manner that best suited them, we would have seen many more jobs created and in the same processess the banks and auto companies would not have needed a bailout. A family that was in foreclosure could have caught up their morgage. A family that was not yet in foreclosure could have paid off the credit cards and auto loan so that they would have the free income to pay their morgage. A family that needed a new car to get to work could have bought one. A family that needed a new washer and dryier could have bought one. A family that needed some cash to survive a few months out of work would have had that cash, without significantly decreasing consumption. A family that desired to purchase an electric car our a more fuel efficient HVAC system could have purchased one. Then we would have had more demand for All in all, a direct distribution of cash to the working consumer class would have done much more towards ending the banking crises, the auto manufacturing crises, and unemployment than the government distributing funds to big companies.
The sum of financial decisions made by individuals is much more important to the agregate of our economy that the sum of financial decisions made by a few large corporations and our government. Thus we would have had a much better result from the spendulous and bail outs if that money would have been distributed to individuals.
That kind of sounds like redistrubtion of wealth, a term that all conservitives have been taught to loath. And it is a redistrubtion of wealth. But direct redistrution to individuals would have been a better investment choice that redustribution to the wealthy - if the purpose of all that redistribution to improve our economy. Historically, wealth has always migrated to the powerful, and eventually it has always been redistributed through social uprising (typically violent) or a total breakdown of economic trade, and then it migrates again to the powerful. It is a never ending cycle. It may be a much better choice to redistribute a little at a time than to allow the situation to get to the point where it is redistibuted by violence and/or decline of aggregate wealth.
We are all hearing on the news how much money our gov has created, how much our money supply has increased in the last few years. I have to assume that the number are true. But the average person on the street will tell you that he is broke or struggling financially. So where is all of this money? If the poor and middle class don't have it, then obviously it is in the hands of the rich. If the rich are spending it, then all of that money is essentialy out of circulation, regardless of if it is in the stock market, or if it has been used to purchase gold, it is still out of circulation for the purpose of the trade of consumer goods and services. A zillion dollars sitting in a bank acount that is paying basically 0 interest is doing absolutley nothing for our economy.
In theory, the cause of inflation is too much money chasing too few goods. So theoritically, with all of that additional money that the government has created, and especially with the production of goods and services at such a low amount, we should have double digit inflation. But we dont. Over the past could of years we have had virtually no inflation. Until all that money that the government printed up gets out of the hands of the rich and into the hands of the consumer, and so far I have seen no great movement in congress or by our president to make that happen, thus we are not at risk of much inflation at all.
Until we start seeing some inflation, banks really don't have a lot of motivation to lend all that money that the gov has printed and distributed to the wealthy who put it in the bank. And until we start seeing more jobs being created, consumers dont really want to borrow. And unless consumers get some money into their pockets they are not going to purchase more goods. And without consumers purchasing goods jobs will not be created. And if jobs arn't being created, and if banks arent lending, and if consumers dont want to borrow, then there will be no increase in demand. With no increase in demand, then businesses dont want to borrow either.
It's a never ending cycle that can not be broken without our gov distributing money directly to the consumer class. Most conservatives will say that if the government started printing money and distributing it to the consumer class to encourage demand that we would then have too much money chasing too few goods and would have a high rate of inflation. What most conservatives ignore is that we have lots of unused capacity to make additional goods, thus we are not really at risk of inflation until our factories are operating at near 100% and until our unemployment rate drops down to it's historical normal.
Only to the extent that the money makes it's way into the hands of the consumer class, who then use that money to increase demand for production. When the money is just horded by the wealthy, it does absolutely nothing for our economy.
I suspect that the reason that the money that our gov pumped into our economy has not helped anymore than it has is because it was a top down distribution of money, not a bottom up distribution. Remember, money on "trickles" down. Our spendulous bill money was given to those at the top, who in turn basically just kept most of the money.
Much of they money that was sent to the banks was either almost instantly repaid by the banks and never served it's purpose of being lent.
The banks didn't want to make loans because with such a shakey economy every credit worthy customer was highly likely to become a non-credit worthy customer the next day.
Companies didn't need to borrow the money to expand because with a lack on demand for their products they had no need to expand. Individuals didn't need to borrow the money because they didnt know if they would be able to pay it back.
Local and state governments that got spendulous money just used the money to fund projects that were already on the list to be funded. Demand continued to decline and thus, very few private sector jobs were created which is why we still have nearly 10% unemployment, 17% total unemployment or underemployment, and a 25% average reduction in work hours for those of us who are unemployed.
I have not seen any specific figures on this, but based on the figures that I have seen, it is highly likely that well over 50% of families have experianced a reduction of income during the past two years. Go stand in front of the post office and ask the next 100 people who walk in if they are stuggling to pay their bills, I will bet that 80% or more would respond "yes". Then ask them if they have recieved any additional income or work opportunities due to the spendulous bill, I would bet that the vast majority would answer "no".
Now if we would have taken the same amount of money that was allocated to the spendulous bill, and distributed it equally to each individual each individual would have recieved a check for about $2,600. That's over $10k for a family of 4. It is also excluding all of the TARP money, individual corporate bail out funding, and all of the increases in misc government programs, etc. When you include all of that stuff the gov could have sent us all a check in excess of $5k - or over $20k for a family of 4. If each individual and family unit was allowed to directly spend our economic stimulous/bailout money in the manner that best suited them, we would have seen many more jobs created and in the same processess the banks and auto companies would not have needed a bailout. A family that was in foreclosure could have caught up their morgage. A family that was not yet in foreclosure could have paid off the credit cards and auto loan so that they would have the free income to pay their morgage. A family that needed a new car to get to work could have bought one. A family that needed a new washer and dryier could have bought one. A family that needed some cash to survive a few months out of work would have had that cash, without significantly decreasing consumption. A family that desired to purchase an electric car our a more fuel efficient HVAC system could have purchased one. Then we would have had more demand for All in all, a direct distribution of cash to the working consumer class would have done much more towards ending the banking crises, the auto manufacturing crises, and unemployment than the government distributing funds to big companies.
The sum of financial decisions made by individuals is much more important to the agregate of our economy that the sum of financial decisions made by a few large corporations and our government. Thus we would have had a much better result from the spendulous and bail outs if that money would have been distributed to individuals.
That kind of sounds like redistrubtion of wealth, a term that all conservitives have been taught to loath. And it is a redistrubtion of wealth. But direct redistrution to individuals would have been a better investment choice that redustribution to the wealthy - if the purpose of all that redistribution to improve our economy. Historically, wealth has always migrated to the powerful, and eventually it has always been redistributed through social uprising (typically violent) or a total breakdown of economic trade, and then it migrates again to the powerful. It is a never ending cycle. It may be a much better choice to redistribute a little at a time than to allow the situation to get to the point where it is redistibuted by violence and/or decline of aggregate wealth.
We are all hearing on the news how much money our gov has created, how much our money supply has increased in the last few years. I have to assume that the number are true. But the average person on the street will tell you that he is broke or struggling financially.
So where is all of this money? If the poor and middle class don't have it, then obviously it is in the hands of the rich. If the rich are spending it, then all of that money is essentialy out of circulation, regardless of if it is in the stock market, or if it has been used to purchase gold, it is still out of circulation for the purpose of the trade of consumer goods and services. A zillion dollars sitting in a bank acount that is paying basically 0 interest is doing absolutley nothing for our economy.
In theory, the cause of inflation is too much money chasing too few goods. So theoritically, with all of that additional money that the government has created, and especially with the production of goods and services at such a low amount, we should have double digit inflation.
But we dont. Over the past could of years we have had virtually no inflation. Until all that money that the government printed up gets out of the hands of the rich and into the hands of the consumer, and so far I have seen no great movement in congress or by our president to make that happen, thus we are not at risk of much inflation at all.
Until we start seeing some inflation, banks really don't have a lot of motivation to lend all that money that the gov has printed and distributed to the wealthy who put it in the bank. And until we start seeing more jobs being created, consumers dont really want to borrow. And unless consumers get some money into their pockets they are not going to purchase more goods. And without consumers purchasing goods jobs will not be created. And if jobs arn't being created, and if banks arent lending, and if consumers dont want to borrow, then there will be no increase in demand. With no increase in demand, then businesses dont want to borrow either.
It's a never ending cycle that can not be broken without our gov distributing money directly to the consumer class. Most conservatives will say that if the government started printing money and distributing it to the consumer class to encourage demand that we would then have too much money chasing too few goods and would have a high rate of inflation. What most conservatives ignore is that we have lots of unused capacity to make additional goods, thus we are not really at risk of inflation until our factories are operating at near 100% and until our unemployment rate drops down to it's historical normal.
Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.
The package is likely to have the greatest impact this year, according to CBO. It is expected to boost GDP by between 1.4 percent and 4 percent and bring down the unemployment rate by between 0.7 percent and 1.8 percent in 2010, higher figures than last year when many of its programs were being set up. The impact is expected to trail off over the next two years.
Inflation is not up because the velocity of money has not increased, so the increase in money supply has not hit us. The increase in the Fed's balance sheet are mainly mortgages that GSEs are on the hook for. So nto a real increase until the Fed asks for it's money back and we have to print dollars to pay them.
This site is taking on more of a blame the rich forum than one of thoughtful debate, sad.
Sorry, I think I partially responded to your comments when I responded to the comments of another poster. I perfectly understand what you are saying about velocity of money, and I actually agree. As money migrates to the hands of the rich, the velocity of money slows. The rich don't spend all their money because they have excess money, thats why they are rich. I am not saying that it is evil to live beneith your means, and I am not saying that it is evil to be rich. But as money accumulates in the hands of the rich, its velocity slow. As that money slowly trickles back down to the consumer class the velocity accelerates. For a rich man to keep ten grand stuffed in a jar in his bedroom for years is not big deal to him, but a poor guy has little choice but to dip into that jar frequently.
Have you every considered the possibility that one of the many contributors to our recession may just be that so much money has been aquired by the rich that they have basically sucked it all from the consumer class (who now have little money to consume with)? What you are suggesting about us not having any significant inflation lends to such a conclusion.
Yea yea yea, rich people are rich because they are so smart or so hard working or because they produce more than they consumer. I agree with all of that. But with factories operating at far below capacity, and with businesses no longer having the need to expand (aquire capital), you have to wonder if being a capital provider (rich) has much value at all to our current economy. Ever consider the possibility that our need for consumption is now greater than our need for capital?
I am in no way blaiming the rich, I am blaiming our society which has accepted the premise that our economy would not function without rich people. Thanks for leading me to that conclusion.
During economic contractions where aggregate demand takes a serious negative shift, government spending can have a very positive impact (as you are seeing today).
(P)rivate sector job creation fell by 190,000 between April and May of this year, jolted markets worldwide including the Dow Jones Industrial Average, which fell 3.2% Friday to its lowest level since early February. In total the U.S. economy has now lost a net of 2.2 million jobs since President Barack Obama signed his stimulus bill, and his administration is now 7.2 million jobs short of what he promised his $862 billion stimulus would help create by 2010. This morning on MSNBC, former Rep. Joe Scarborough (R-FL) pressed prominent Keynesian economist and director of the Earth Institute at Columbia University Jeffrey Sachs on whether it was too early to declare President Obama’s stimulus a failure. Scarborough had to ask the question twice, but Sachs finally relented: “It did fail.”
Morning Bell: Why Obama’s Stimulus Failed
Correction; we had a huge debt to pay following WWII.
f you are falling on opinion pieces to make your point, maybe you should not say anything at all:shrug:
The problem now is we don't have a whole lot of room to borrow more money. We now have more debt than at any time in our history. $54 trillion is a lot of bread. We're tapped out. Broke.
Just wondering, but why you are saying "we", I assume that you are refering to the American public.
If "we" owe so much money, they who is it that "we" owe it to? Could it possibly that the middle class owes it to the super-rich?
If this is the case, then where did all of the middle classes money go? could it be possible that somehow the super-rich have aquired it all?
Has the middle class just suddenly gotton a lot "stupider"? Have the rich suddenly gotton a lot "more smarter"? Or is this just the natural migration of money upwards on the economic ladder where over a period of time, without a force that tends to redistribute wealth, the wealthy become wealthier because they control the means of production and the poor become poorer because they are paying rent to the wealthy to rent access to capital?
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