On demand side economy?
The supply side economy in communistic world failed there and the military build up economy for the capitalists also failed.
That leaves only demand side economy to be useful for human kind. From birth to grave, every person has to have a quote of goods and services(communistic thinking). But, the economy is based on obsolescence and replacement(MIT A. P. Sloan) of goods and services. Which means every penny you earned must be spent to maintain any economy. We can build the economy bigger and bigger; but the value of the dollar must fall, so that each penney earned has to be spent wisely. It is not inflation but an adjustment of wage and price control.
Job growth with interest rate falling is bad for the economy. Building our economy so far from $6 trillion on the way to $16 trillion, has to have steady interest rate(always return to 5%), In order to have each penney spent, the dollar devaluation does the trick, except the devaluation is done in a complex interactive formula, which is globalization with dollar sitting in between the developed countries and the underdeveloped currency. Currency from growing economy has to be pegged to the dollar as these countries mature along with America. China, India, Russia and Brasil are those countries not yet matured.
We needed and had a new adjustment when Greenspan did 6.5% interest rate; causing the present recession since 2000. It took many more years to recover(1960) from 1929 bubble burst. So, this time goldielock's softlanding had to take small steps of monetary policy with jobs for everyone, but only part time. Hold the mayo(fed policy steady) and eat the meat and vegies in the sandwich with plenty of other condiments. Live is more friendly and rewarding when god's language is understood to be in the stores(jobs creation) with plenty of goods and services(to spend your last penny).
Demand side economy has spoken. so far so good. |
