Nonsense. If Obama rehired the 500,000 public sector employees who got their pink slips during the recession, then we'd have positive inflation in no-time-flat. But the bigwigs don't want that. They don't want full employment or higher wages or workers to a bigger share in the gains in production. What they want, is a permanently-hobbled economy that barley grows at 2 percent so they can continue to borrow cheaply in the bond market and use the proceeds to buy back their own shares or issue dividends with the money they just stole from Mom and Pop investors. That's what they really want. And that's why Krugman and Summers and the other Ivy League toadies concocted their wacko "secular stagnation" theory. Its an attempt to create an economic justification for continuing the same policies into perpetuity.
So what can be done? Is there a way to turn this train around and put the economy back on the road to recovery?
Sure. While the political issues are pretty thorny, the economic ones are fairly straightforward. What's needed is more bigger deficits, more fiscal stimulus and more government spending. That's the ticket. Here's a clip from an article in VOX that sums it up perfectly:
"But if the exact cause of the bond boom is a little unclear, the right course of action is really pretty obvious: If the international financial community wants to lend money this cheaply, governments should borrow money and put it to good use. Ideally that would mean spending it on infrastructure projects that are large, expensive, and useful -- the kind of thing that will pay dividends for decades to come but that under ordinary times you might shy away from taking on...
"The opportunity to borrow this cheaply (probably) won't last forever, and countries that boost their deficits will (probably) have to reverse course, but while it lasts everyone could be enjoying a better life instead of pointless austerity." ("Financial markets are begging the US, Europe, and Japan to run bigger deficits," VOX)
That's great advice, and there's no reason not to follow up on it. The author is right, these rates aren't going to last forever. We might as well put them to good use by putting people back to work, raising wages, shoring up the defunct welfare system, rebuilding dilapidated bridges and roads, expanding green energy programs, increasing funding for education, health care, retirement etc. These are all programs that get money circulating through the system fast. They boost growth, raise living standards, and build a better society.
Fixing the economy is the easy part. It's the politics that are tough.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
5
5
3
