Government Deficit Spending is America's Last Best Hope for Recovery (Richard Backus)

[Tace]

Richard Backus -- World News Trust

Oct. 13, 2009 -- It was most amusing for me to see Alan Greenspan explaining on the BBC to an otherwise trusting viewing audience that the world economies would experience severe economic crises every few years as a matter of course, and this was quite "normal" and inevitable. Although the economies of the world will experience many ups and downs over the years, they are not at all "normal" but usually the consequence of central bank and government screw-ups. If the government would try to support their average middle- and working-class individuals and not just their rich "sponsors," future economic crises could be avoided. The government simply must accept the basic realities and paradoxes of capitalism and abstain from following those "voodoo" economic theories proven time-and-time-again not to have worked as advertised (but profitable to the rich). If they would simply regulate the economy in accordance with sound economic principles, the consequence and extent of future crises would be significantly reduced and workers worldwide could experience the high standard of living that they deserve.

The factor of capitalism most misunderstood is that, if people want to get richer in money terms, someone else must take on debt. Capitalism is all about getting richer. Financial assets are obligations assumed by some second party, individual or institution. There is no invisible genie who borrows from the rich and will magically pay them back in the future from some secret funds source. The claim by rich Republicans that they don't want the U.S. government to take on more debt is simply a misunderstanding about what has made them rich. The greatest increases in wealth always occur when governments assume large deficits, most commonly during a war or recession. Private individuals and businesses have limits to the amount of debt they can assume. The U.S. government has fouled its own nest by sitting idly by while Americans lose their jobs, savings, and the ability to take on further debt. Businesses likewise have been put in a position in which they no longer wish to take on debt by investing in the United States, this situation also caused by government mismanagement of the economy. The U.S. government doesn't have these borrowing limitations and, if it is unwilling to take on more debt, capitalism in the United States is in serious trouble.

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http://worldnewstrust.com/commentary/3823-government-deficit-spending-is-americas-last-best-hope-for-recovery-richard-backus

[ixion]

1. I strongly disagree

America needs to start making this again. Government deficit spending will not solve the issue.

[endless october]

2. no, bringing back manufacturing is the best hope for recovery.

long term deficit spending is the suicidal policy of Republicans.

[Po_d Mainiac]

3. Wonder if Backus will be change his mind if EUR/USD=$175+ n/t