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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (126872)	12/10/2009 11:53:21 AM
From: Steve Lokness	Read Replies (1) \| Respond to of 541740

Mary; Wow! You have asked a lot of questions. I think unemployment would have been higher yet - but I also think the pain would have been quick and done. More like the depression in 1920. I think we are in for a long protracted painful decade at least. Maybe generations if we don't get inflation that seems to now be the favored solution to the debt we are taking. It is US versus THEM. I have no idea what that means? You mean America vrs the rest of the world? If so, our government has screwed us big time by becoming indebted to China to the point they can pull our strings. (see below) What do you think Bernanke is trying to do? If Bernanke is doing the right thing, then how in the world did we end up at this point since he is in charge of finances and is the expert on the Depression. if he was such an expert shouldn't he have been able to prevent it? What tools do Austrians have to contradict Bernanke? The one tool Austrians have that Bernanke doesn't seem to is .....prevention. Austrians believe that small hickups in the economy is good for flushing out the inefficiencies. If money is wrongly allocated, a downturn - without government INTERFERENCE - redirects capitol. I suppose you will say that inaction is not a tool, but that doesn't mean it isn't wise policy. The reverse of this is the tools used first by Greenspan and then by Bernanke. That is to use all of the tools in your bag of tricks to try to pretend that inefficiencies do not exist. This stimulative prescription by Greenspan/bernanke was the great experiment by the Bush administration and led to bubble after bubble with no hint of an end in sight. (Even Greenspan now admits that it failed - that he was wrong). So instead of being flushed out, the inefficiencies were magnified. Magnified first by Greenspan and then by Bernanke. Their tools led us to a bank meltdown, countries going bankrupt and real unemployment at 17%. We are not at the end yet. The bill for using those tools is growing exponentially and even if this is as bad as it gets - our economy will be held down for decades as we deal with the debt. Think of it this way; ....If two families are living side by side - yours and mine. You take out a loan and go shopping and I instead put my money in the bank. What happens? Your income goes down as you now have an extra bill - to pay the bill on your loan. My income goes up as I now have additional income - the interest on the money I put in the bank. Now think of the two neighbors as countries. And think of this played out year after year after year compounding the interest. Pretty soon you are broke and indebted to me forever while I go around the world and buy up all kinds of things I want. steve