I'd argue you're completely off your rocker. You are arguing that money spent on pet rocks, chia pets and nail salons are more effective then money spent on NASA, drug breakthroughs and applied materials research. Can the private sector use money better than the government on average? Yes. But can the private sector waste money on effectively useless **** that could better be used spent on research projects? Absolutely. Honestly, anyone who says that idiotic line to me has no understanding or history at all of what governments have produced in terms of wealth and commercially tangible products.I would argue every dollar the government taxes is a dollar that the provate sector can use more effectively and with better multipliers than the Fed. Using deficit spending to get around that economic reality is finally becoming untenable.
That's probably true.We have artificial demand propped up by government wages, programs because neither side of the aisle pays the least bit of attention to the Keynesian idea of cutting during boom and spending during bust, its spend no matter what the cycle is doing. That means we need to come up with another government spending model or just quit trying the one that is not working.
No. As much as I dislike this notion, I think we should have actually enacted McCain's mortgage plan or something like it. Until we deal with the massive debt consumers have on their houses, we're going to see slow growth as consumers slowly deleverage. Virtually any amount of stimulus or tax cuts would have never worked when the issue is largely debt and reliable financing. It doesn't matter if the government spends $2 trillion on a stimulus program when companies cannot even get their lines of credit renewed for 30 days and when people cannot refinance their mortgages to reduce their debt. The ugly fact of modern capitalism is that it requires constant, reliable, predictable financing. Take that away and our economy is a falling house of cards. $2 trillion in spending won't fix that problem. This is why I mentioned the issue of direct lending as a "solution." That alleviates the issue of financing but in puts in place a far, far, far, far, far worse outcome down the road. The state essentially gets stuck with huge amounts of NPLs and the private sector gets addicted to cheap loans. That cannot keep going indefinitely as we're seeing in China and when it crashes, it will destroy your economy.Are you suggesting that we should have been engaging in the Krugman school of thought that the stimulus should have been some monstrous 3 trillion dollar program? Because I dont think that would have passed politically on either side.