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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: ChinuSFO who wrote (132571)	4/2/2013 8:03:02 AM
From: RetiredNow	Respond to of 149317

I understand you are prioritizing, as are most Dems and Obama. However, it's a calculated risk that has a very high probability of having serious unintended consequences. Our economy was great and generated a lot of wealth precisely because of the long term expectation of stability, fairness, and property rights protections afforded Americans by the US Judicial system. With the rampant fraud and criminality now going on within the financial system and welfare programs, the average American and business man has no expectation of stability nor fairness, and now even believes his property rights have a decent chance of being violated. After MF Global and Cyprus, depositors at any financial institution can't say with certainty that their money won't be stolen from them. All of that has a major chilling effect on money velocity, which is a proxy for economic activity. When money velocity and economic activity are plummeting, it negates most of the stimulative efforts of money printing and deficit spending. This is why recovery is so tenuous and tepid. Check out M2 money velocity below. It's a very ugly chart. Re-establishing the rule of law is step one to getting to a sustainable recovery. Step two would be re-establishing capitalism so that banks can't gamble with depositor money, but must set up separate investment banks where they will go bankrupt if they make bad investment decisions. Capitalism works best when actors who take risks get reward when they win and they alone suffer the consequences when they lose. Right now, we have crony capitalism where heads the banks win and tails the banks lose and the taxpayer picks up the tab. Not good and guaranteed to end badly for the taxpayer either way. research.stlouisfed.org