Amy Goodman finally asked Johnston, "What do you feel would single-handedly most stimulate the economy and make the biggest difference right now?"
Johnston responded, "Well, a recession is, by definition, the collapse of demand. People don't have money to spend. If you own a small business, you don't care nearly as much about a tax cut as having more customers who can spend more money buying your products and your services. One way to think about this is that thirty years of supply-side economics have left us with this enormous supply of capital. American companies have $1.8 trillion of cash right now. Now, understand what that means. It's $6,000 for each man, woman and child in America, cash they're not investing, they're not using to create jobs, to increase their profits; they're just hanging onto it."
Johnston added, "So, on the other side of this, people don't have jobs. We have 15 million people nearly out of work, many of them more than six months, and another 12 million or so who can't find as much work as they want or who have quit looking for work. We have an imbalance. And in the same way that in your body your arterial and venous blood flows have to equalize or you don't live, we have these huge pools of capital that cannot be profitably put to work right now. So what the government should be doing is focusing on demand. And if Obama turns out to be a one-term president, the principal reason, I suspect, will be that he did not put in a large enough stimulus package in the beginning to overcome the collapse of demand brought about by years of policies that focused on pushing down wages and increasing profits to businesses."
http://fora.tv/2008/04/14/David_Cay_Johnston_Talks_About_Free_Lunch
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