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Politics : View from the Center and Left

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To: Steve Lokness who wrote (201223)	9/14/2012 4:07:19 PM
From: Sam	Read Replies (2) of 541879

That's why all the stimulus pumping we have done has barely moved the needle on unemployment. I am going to jump and give my view on why the stimulus "barely moved the needle on unemployment." It isn't original, and you have even said a part of it before. The part you've noted is the crash in construction. The part I would add is related to that, and that is we were in a credit (debt) bubble. That bubble borrowed "growth" from the future, as people took "advantage" of the debt bubble, making lots of money "while the sun shined bright." The collapse that followed was the result of people taking on -- and those wonderful savvy financial institutions giving -- too much debt. I submit that until everyone's balance sheets are repaired, "stimulus" money won't be very effective. Nor will any President, whoever he/she may be, be able to meaningfully increase employment. The boom created the mirage of wealth creation. We would have been far better off today if it had not occurred, if we had just gone along a more normal economic trendline. There were many culprits in all this, but financial institutions and Greenspan's Fed were the main ones setting the tone, and allowing (even pushing) it to get out of hand.

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