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.


Kevin B. O'Brien
A damsel with a dulcimer in a vision once I saw.


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