[quote=CA renter][quote=SK in CV][quote=SD Realtor]Obviously Bush is behind all of this, even QE4, 5, 6 and 7![/quote]
I’m quite sure nobody has ever claimed that Bush is behind it. It’s as ridiculous a claim as that which charges this is Keynesian economics at work. It’s not. Keynes, at most, was agnostic on monetary manipulation as a means of economic stimulus.
I’m not so sure that it doesn’t benefit the economy as a whole, but there’s no question that the biggest beneficiaries are debt holders. That’s the big banks. Is there a better way to do the same thing or better for the economy as a whole without particularly benefitting the banking industry? I could be convinced, but I haven’t seen any ideas that meet the requirements.[/quote]
If we had allowed deflation to work its magic back in 2008, I think we’d be better off today. Jobs would have been lost, wages would have fallen, but asset prices would probably have fallen faster and further, leaving Joe Sixpack with more purchasing power. It would also have reduced the income/wage gap that is destroying our economy.
Debtors would lose their homes, but they would also be freed from thousands, or hundreds of thousands, of dollars in debt. Creditors would lose, but higher interest rates going forward would help mitigate some of the pain.
Interest rates would be higher, rewarding savers and making spenders think more wisely about their purchases. The government could have avoided taking on all this debt and we would have a smaller the debt burden, one that cripple us for many, many years to come since we took on so much debt to save the bankers/wealthy — especially when (if) interest rates rise.
We could have stimulated the economy by putting more money into our infrastructure and R&D funding. Stimulus is good, but not when it’s directed at keeping asset prices abnormally high.
Just MHO.[/quote]
um…How does deflation help a nation that is so knee deep in debt? Those IOU’s sure end up costing a lot more when things are in a deflationary environment. And with that much credit the our government keeps spending on, how can we possibly be deflationary in the long term?
