- Joined
- Sep 13, 2020
- Messages
- 45
- Reaction score
- 8
- Gender
- Male
- Political Leaning
- Moderate
trump inherited the longest economic expansion in American history. It was not the most rapid, far from it, but does the average American really want the most rapid? Most Americans would prefer a decade of 2.5% growth than a four years of 3.5% growth, one year of -2% growth, four years of 3.5% growth, one year of -2% growth.
trump promised to push the economy to grow more. he introduced who deficits into a growing economy, which is odd, and strongly incentivised not keeping cash-on-hand. We got more 2.5% growth, but were paying a lot more for it.
If companies do not have cash-on-hand, they go to repo market to borrow money with very secure securities. In September of 2019, the repo market failed. No one had liquid cash, and the September corporate tax bill was coming due. Almost every major company in America was technically bankrupt, unable to pay their bills. That had never happened before. It was a market failure of epic proportions.
But oddly simple to solve... In a dangerous way. The Fed printed money and distributed it to companies through the repo market. It was not exactly quantitative easing, which is meant to fight deflation, but rather a desperate attempt to give companies money to keep them from going bankrupt. The Fed had to give up caring about inflation or deflation.
There was a slow crash from September to February, when we officially slipped into recession. That was all before Covid-19 was an economic issue. We can only guess what would have happened during that recession, because the Covid-19 global depression hit right after it.
trump promised to push the economy to grow more. he introduced who deficits into a growing economy, which is odd, and strongly incentivised not keeping cash-on-hand. We got more 2.5% growth, but were paying a lot more for it.
If companies do not have cash-on-hand, they go to repo market to borrow money with very secure securities. In September of 2019, the repo market failed. No one had liquid cash, and the September corporate tax bill was coming due. Almost every major company in America was technically bankrupt, unable to pay their bills. That had never happened before. It was a market failure of epic proportions.
But oddly simple to solve... In a dangerous way. The Fed printed money and distributed it to companies through the repo market. It was not exactly quantitative easing, which is meant to fight deflation, but rather a desperate attempt to give companies money to keep them from going bankrupt. The Fed had to give up caring about inflation or deflation.
There was a slow crash from September to February, when we officially slipped into recession. That was all before Covid-19 was an economic issue. We can only guess what would have happened during that recession, because the Covid-19 global depression hit right after it.