Deficit arguments — 4 Comments

  1. David’s proposal is to spend out of the crisis. Which is not unreasonable in many ways. I think the argument on the other side is that we are too small a market for that to have a significant impact, therefore no bang for your buck. Really what it boils down to is whatever we do will have very little effect, so the government is opting for a batten down the hatches and try to be in reasonable shape for the upswing, essentially leaving all the stimulus activity to the rest of the world in the hopes that as they lift we get to piggy back on that. BTW, this happens to consolidate the position of the wealthy through deflation, while battering those who are on low incomes with big debts, so guess who has been bending their ear (again). David’s suggestion works out to be more equitable and if we assume that rampant inflation will follow the current situation (which it usually does) then any deficit on the part of the country will be be reduced by inflation. If I loose my job I’ll focus my hunt outside this country, I’m excessively prudent, so I didn’t cause this situation and don’t plan to pay for it if I can avoid doing so.

  2. Those with cash in hand, or even secure homes and incomes (like clergy!) are definitely going to do much better.

    I wonder if some employers are not taking advantage of the recession to push down wages?

  3. I agree with everything you say except your last point. David McWilliams has contributed to the downfall of the economy by his constant mantra of “I told you so”, his Prophet of doom and gloom mentality will not get us out of this mess but only drive us further in.

  4. Except he is one of the few voices arguing for a Keynesian response to the crisis; the rest are taking us down the path of the 1930s, a depression that only really ended with the cataclysm of war.

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