why didn't we think of that?
Posted by howard in nyc in bad economy, bad karma, bad politicians
obomney announces that he and the g-8 leaders have reached a consensus that they all will do more to promote growth and create jobs.
brilliant! damn, someone should've come up with this months ago. growth! that's the ticket.
austerity measures have resulted in collapse of governments in greece, riots in the streets of spain and italy, and ouster of the president of france in favor of an anti-austerity socialist. and the ability to retire the debts of these nations has not occurred. in other words, austerity measures have fixed nothing.
so, next they'll try growth. heh.
what can a government possibly do to promote growth and jobs? specifically a government that is running deep annual budget deficits?
spend more money.
and where will that money come from?
they'll just borrow it. and/or raise taxes. or print the money.
these clowns already borrowed unprecedented sums and spent into the economy in the name of stimulating economic growth. and they got a little bit of growth. now the growth has ground to a halt in europe, and is likely to do the same in the usa. the money they borrowed is still owed, plus interest. the money they printed caused significant inflation of oil and food prices, sufficient to drag economic growth.
they are stuck. cut spending and decrease deficits = economic stagnation. borrow/print and spend = inflation sufficient to stagnate economic growth.
the short-term benefits of borrowing and printing have become shorter term and less effective each round. here, in europe, and in china.
there is no good way out. economic pain is inevitable. all they can determine is the particular path to pain--inflation or debt default.
i wonder if they realize this, and are lying, or if they have managed to swallow their own bs and believe that if they just promote growth and job creation, the economy will be fine?
there is no magic 'growth ' button to push. borrowing/printing more money will make things worse. they have already demonstrated this reality, with the borrowing/printing of the past three years, and the subsequent inflation, stagnant job results, stagnant gdp growth and return to recession in europe.
excess debt must be paid off or defaulted. deficit spending must stop when you have so much debt, no one will lend you any more.
growth financed with debt eventually fails. eventually is here. debt shrunk by printing money is accompanied by the inflation caused by printing money.
there is no 'solution'. the fruitless attempts at finding a painless solution are now farcical. there is only the choice of what flavor pain we suffer.
