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Politics : President Barack Obama
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To: RetiredNow who wrote (128479)12/6/2012 2:20:37 AM
From: koan  Read Replies (2) of 149317
 
I think your ideas are antiquated. Serious universities pay no attention to them. Actually they never did even when Von whomever he was, was writing them.

As you know I am a Keynesian, and saw how the stimulus of WWII worked its Keynesian magic on the huge personal and government debt and great depression.

Bernanke has added a new variable this time. Historically low interest rates. So what does that portend? Unlike supplyside economics which theorizes low taxes create jobs, which I think is dead wrong, Keynesian theory says consumer demand creates jobs. If there is a demand, someone will meet it and a job is created. On the other hand the rich/businesses do not create jobs without demand. Seems a simple concept to me.

So my theory is two and a half variables are ready to goose our economy into high gear. These historically low interest rates are allowing millions of people to refinance at very low rates. The money saved from the refinancing will allow consumers much extra purchasing power and businesses to start with lower costs and addressing new consumer demand.

Additionally, (the half) I expect increasingly significant income redistribution from the rich to the to the middle class, so more spending. I can sure see it happening like that in our little micro market laboratory up here.

And so we will have greatly increased revenue and be able to pay our government and personal debt off. And people will start purchasing real estate big time and a new real estate boom will ensue. 50's here we come. Well, except Ozzie and Harriet will not be there this time. Well, they may be there, but they will be stoned like normal people.

Just like what happened in the 40's.

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