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Strategies & Market Trends : ahhaha's ahs
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To: ahhaha who wrote (13910)5/25/2009 6:49:46 AM
From: frankw1900Read Replies (2) of 24758
 
Government spending is spent in the US and so is a form of investment. Nothing is lost. Why isn't government spending a good idea? Because over time it returns less than private spending at the same level. And, eventually, government spending returns are negative where that's never true in the private sector.

I looked through this post for indications of inflationary scenario and this is what I glommed onto.

Diminishing returns are sign of both falling productivity and insensitivity to the market in the sector invested in. Falling productivity does mean higher cost which eventually must be passed on in higher price, or lower wage, or lower profit, or a combination of all three. Americans (and Canadians?)won't put up with that so will demand higher wages and profits and therefore will see increasing prices.

The flip side of inflation is to look not at increasing prices but increasing poverty - every year income buys less.

The last great inflation in the 20th century took place in Soviet Union. There was huge investment by the government. Prices didn't change but folk had to line up to buy at the bakery, and get there early, because it was going to run out of bread. Folk had a bit of money but effectively they couldn't buy anything desirable. That's poor, and that's where we're going.
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