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Strategies & Market Trends : The Art of Investing
PICK 49.84+2.3%Dec 10 4:00 PM EST
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To: kidl who wrote (5041)8/8/2022 3:47:10 PM
From: Sun Tzu1 Recommendation

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S. maltophilia

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To bring down the inflation, you need to raise rates. But doing so will bankrupt a lot of people, so the government will have to increase the spending in nearly the same amount to inject money into the economy and prevent it from collapse. This is what happened with Volker and Reagan, though it was more a matter of happenstance and by design.

This policy is another way of redistributing the capital within the economy. The central bank drains it from everyone, and the government gives it back to the few where they think it is needed. The reinjection is where the partisanship bickering will put an end to it. Dems will want to build infrastructure and social programs. GOP has traditionally preferred to spend it on things that go boom or fly very very fast. Neither side has enough votes to make their vision happen - so America will end up stuck in the middle going nowhere. Additionally, GOP's base may not even want the spending on military/defense (though I suspect they will still go along with it).

In case it is unclear - I am not making a political statement here. I am just saying that the kind of problem that the US has right now, has been solved via capital redistribution since the dawn of civilization. But that is a hard political pill to swallow even in the best of times, let alone when the country is in the midst of a cold civil war.
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