On 11/19/2012 4:56 PM, D.C. Frandsen wrote:
But I also have a problem with the idea that creating new customers by which I
guess, Kevin, you mean demand, is the only solution. I believe our problem has
been that we have been fixated on creating demand only, not on the type of
demand we are creating.
I only wish we had been fixated on creating demand. Instead, everyone is
fixated on something they call the "fiscal cliff", which is largely a
non-issue. We had budget surpluses as recently as 2000, and there were
people back then who worried about what happens the the bond market when
the federal government is paying down debt. Would it reduce the supply
of bonds to the point that it might destabilize the bond market? Then
Bush came along, put a huge amount of money in the hands of the wealthy,
then started a couple of wars without any provision for paying for them.
Changing the situation is mostly a matter of returning to the sensible
policies we had before Bush came along, when adults were running the show.
The problem is that doing it all at once is going to cause serious
economic problems. Right now, there is a ton of cash that is mostly on
the sidelines because the people who have it do not see opportunities
for productive investment. The Republican answer is to give those people
even more cash on the grounds that they are "the job creators". That is
complete hogwash. There is already tons of investible cash out there
now. It will get invested only when there is demand for the products
that could be produced. I would prefer that these products be the
"right" kind, which for me would include renewable energy, efficient
transportation, etc. because that global heating problem is still out
there. But as Keynes pointed out, whether the right products are
produced is irrelevant to the problem of getting the economy going again.
Regards,
--
Kevin B. O'Brien
zwil...@zwilnik.com
A damsel with a dulcimer in a vision once I saw.
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