Baker: The Story of the Housing Crash Recession That Politicians Don’t Want to Tell
Boosting Demand
Over a longer term we can expect that net exports will fill the demand gap. If we bring our huge trade deficit close to balance by selling more abroad and importing less, it will provide a substantial boost to demand. However, this will require that the dollar fall in value relative to the currencies of our trading partners, making U.S. products more competitive. That is a process that will take time. With many of our trading partners also in severe slumps, we cannot expect any major improvement in our trade balance in the immediate future.
This leaves government as the only remaining source of demand. This is not a question of whether we prefer the government or the private sector. We need the government sector to fill the gap in demand because the private sector will not do it. And that will be true no matter how much we love the private sector and its job creators.
Until we get our trade deficit closer to balance, we will need large government deficits to fill the gap in demand created by the housing bubble. That is the simple reality that neither party seems anxious to tell the people.http://finance.yahoo.com/blogs/the-exchange/baker-story-housing-crash-recession-politicians-don-t-170039954.html
This article gives some support to the notion that the privatization folks are not doing the job...and now is the time to open up the books and implement the full employment act....
= new reply since forum marked as read
