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Politics : View from the Center and Left
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To: Jeff Hayden who wrote (126816)12/9/2009 8:02:41 PM
From: Steve Lokness  Read Replies (1) of 541647
 
Jeff;

In fact he has pointed out many times that if the stimulus is half-hearted, it is likely to fail.

We have been stimulating for a long time now. That stimulating is what led to first the stock market bubble and then the housing bubble. Bigger and bigger bubbles to correct for the last stimulate ..........and so you want to do more of this stimulating and think it will be different this time? You can make the argument that we always should have spent more - even as some of us are gasping now. Because of our already accumulated debt we are spending WAY more than any other country (except perhaps Japan).

So which is worse, deficit (that inevitable inflation will eventually cure), or extended recession or even depression?

You say that is it is some kind of rule or mandate. The fed is already at zero - how much lower do you expect it to go to bring on this inflation? Did you see the look on Bernanke's face when someone ask him a couple days ago which way interest rates would go? He looked at the floor and said ...."well they can't go much lower". Jeff, you can't force people to borrow money. .........AND, you better be careful what you ask for. If it is inflation that you want to retire our debt, then be prepared for all that means.

So interest rates can't go lower and you expect inflation and with inflation that means of course much higher interest rate cost. Soooooo, when that happens who will be building houses then? Buying cars? What will that do to the economy?

steve
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