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Politics : Formerly About Advanced Micro Devices
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To: combjelly who wrote (751960)11/9/2013 9:28:57 PM
From: Jorj X Mckie6 Recommendations   of 1577019
 
Right now the biggest drag on the economy is tight credit.

tight credit? are you kidding? Interest rates are exceptionally low. That's clear indication that credit is anything but tight. There is tons of money out there waiting to be borrowed. The problem is that debt levels are still too high. There is no demand for money. It's kind of like offering someone a big ole 22oz medium rare NY steak after they just ate two double cheeseburgers and chili cheese fries. No matter how tasty that steak looks, they still can't eat another bite.

And what caused this situation? Well...what happens when the government coerces lending institutions into giving loans to people who can't afford them?

The problem is not tight credit. It is that the excesses of the dotcom boom were never allowed to be normalized before the government stepped in and created the RE/Credit bubble.

You'll see more lending when the economy recovers. And it won't recover as long as artificial stimuli are applied to the market that sabotage the natural economic processes.

The economy would have recovered by now if the government hadn't stepped in and tried to stop the economic correction. We'll probably be in a Japan-like economic stagnation for the next 20 years because of the government meddling.
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