Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (607635)	4/13/2011 11:28:58 AM
From: i-node	Respond to of 1583844

Personally I think there is something of a stimulus effect from governments running deficits. But that fact doesn't mean they always, or perhaps even normally should try for a fiscal stimulus in bad economic times. The stimulus effect is IMO normally smaller, often much smaller, then the supporters of fiscal stimulus represent it as being. When the government spends money, it has to either tax it or borrow it (pulling money out of the economy as it puts it in), or "print" it (creating future inflation, and of present reactions to the risk of future inflation that can act against the stimulus effect). I think there is, too -- just as there is with ANY (e.g., military) spending. And there may well be times that "targeted" stimulus can be useful, but not when we're borrowing at the crazy levels we are. There is a segment of the public who believe that the money just comes out of thin air. On a left wing message board I've posted on some, the suggestion was to "inflate our way out of the debt". That is, just stop borrowing then let inflation make the debt meaningless. And that was considered a legitimate approach to dealing with the debt problem (I'm not sure what you do about the interest, which coincidentally inflates the amount of debt; they didn't see fit to address that). I just don't think the political will exists [yet] to solve this problem. The Ryan Plan is a really impressive start IMO, but I see this morning Obama's plan is another "tax the rich" approach.