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Politics : View from the Center and Left
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To: JohnM who wrote (139867)6/28/2010 3:10:55 PM
From: Steve Lokness  Read Replies (2) of 542008
 
John;

And here's Krugman arguing we are heading deeper into a serious "depression."

Krugman seems to be missing the intent of the fed for some time now - that is that they have been juicing the economy in every way imaginable. Have you looked at CD rates lately? Why do you think they are so low? Could it be that demand for money is not there? Krugman may be right (not sure I buy it though) that we are heading deeper into a depression, but we have had stimulus after stimulus after stimulus and still the economy doesn't turn around. AND of course the debt just continues to build. And so now he wants more of the same that hasn't improved a thing.

The one explanation that explains this is the natural cycling of the economy as predicted by some of the Austrian thinkers. We just need to decrease the inefficiencies that have built up in the economy and that just takes time. We have all seen these inefficiencies all around us. A perfect example is my neighbor who used his house like an ATM machine to buy up commercial properties like they were poker chips. Now there is no way in hell he can pay the bills and so he must sell. To suggest we must crank up the stimulus machine so he can be bailed out of his recklessness is just absurd - because the inefficiencies will then remain in place. The bank now wants to do a short sale on his house and yes he will lose it. But no amount of stimulating in the world will prevent this because the supply went way over the demand.

Steve
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