It amazes me how well Paul Krugman can answer his own questions. We have declining Numbers throughout the economy; yet Paul wants to throw in more Cash. He would probably state that I misuse the term ‘Stagflation’, but what should We call the current Process? The only exact aid to the economy by Stimulus would come if the Cash went directly in the Pockets of Consumers, and they would probably decide to Save the Money! READ MY LIPS: Nothing is going to raise Output except Sales. Nothing is going to raise Sales, except for greater amounts of Disposable Income. Here is the tricky part, as greater amounts of Disposable Income generally needs a reduction of financial commitments. We most definitely do not need more Bankers willing to lend more money, even at cheaper Interest. We don’t need Government to give Business the Profits which could not be earned by their operation. We either need higher Wages, or more Aged Consumer Product, in order to increase Consumption. I am Waiting for the ole Mule to get too old to get up in the Morning, afore I shoot her!
Jeffery Miron makes a very compelling argument with which I basically agree. Neither of Us like the concept of Big Government, and We both hate the Government Buyout of Investment Risk when it goes bad. Of course, We are both badly outvoted in Congress, who basically ‘Kiss the Hands’ of Those who feed them. Jeffery does not mention the obvious Necessity of removing discretionary Cash from Those who made the bad investment decisions in the first place, he probably doubting the veracity of honest bankruptcy. There is something Wrong with poor Investment Risks getting Government loans though they are poor Credit Risks, simply to sell ‘Blue Sky’ Investment to lesser nobles, who are granted Tax Writeoffs at worst repayment process. I need a new Pick-up, so if you advance me the money, I’ll will explain How to bundle the loan with other loans of like nature and value; later getting Government to pay the Investment back with Interest, after I default on the loan. Sound familiar?
I sound a little sour this morning, as I detest Cloud formations in July; especially when they do not produce Rain. I have not really seen the Sun in 6 Weeks except for short Interludes, and I and the Corn feel the same way. We might get a good harvest, but like the Government; this is not the Way to do it. We are getting the watered down version of good health–whether in Life or the Economy–and I do not admire the effort. We need a President who is busy with designs to cut down federal expenditures, not One dedicated to shoveling more Cash into the economy. I will not speak about the dangers of politicalization of the Fed and Treasury; simply expressing the Thought that Government and/or Banking should not be turned into a TV Game Show. lgl