There are two type of governments, democracy and communists.
Democracy government has freedom of choosing their government leaders, but had no qualifications needed. A pretty face will do fine. Communist countries choose their leadership by trials and pull up by their bootstraps to serve the country. Not necessarily better, but they have better 5 year economical planners organized at times. Democracy play by ear.
Democracy country have poverty at a level that you can not believe, because the government did not know how to bring up standards of living except by innovations. No invention, no better standards of living. Communist countries go by quotas; each person had to have food, clothing, a pair of shoes, etc.
What the communists need is just to print more money and give people more quotas, and each person lives comfortably. Democracy needs taxation to give people more benefits. No tax increase, no welfare. So, we have to have innovation to have gasoline consumption tax to give people more welfare in goods(auto, housing mortgages) or services(health care by food and clothing).
In the end economy is about quotas per person, not waiting for innovations to come before we starve to death. Many countries had to print more money to give their citizens work and a better living. US is doing it by retailing to the citizens to create manufacturing jobs, some innovations but mostly meeting quotas of food, clothing, autos and housing. Quotas are steady in demand or supply side economy; not boom or bust into recessions often, if by innovation(boom) or lack of it(bust).
Subprime scare is just an illusion, because mortgages are bought by federal government(fannie mae and freddie mac) financed by printing money(federal reserve bank pretending to sell treasuries then repo them) needed for growth. |
