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QE was meant to work in tandem with the stimulus bill put forward by President Obama. The stimulus bill would create jobs to help fuel demand, and interest rat

by dev1n 11y ago

QE was meant to work in tandem with the stimulus bill put forward by President Obama. The stimulus bill would create jobs to help fuel demand, and interest rates would stay low so that loans could be made more easily to companies that contracted with the government, thus helping them to expand and creating more demand in the economy. Unfortunately the stimulus bill wasn't large enough (even though it was 787 billion dollars). This was the largest recession ever. The Great Depression needed a stimulus bill called World War II. What followed were over 2 decades of prosperity. The most recent stimulus plan simply wasn't big enough to allow companies to grab Wall Street's attention, so Wall Street parked its money elsewhere. TL;DR: not enough jobs were created so people got poorer while Wall Street got richer. Edit: phrasing

pm90 11y ago
Maybe the reason for increasing prosperity was also the nature of economic expansion after WW2. Most of Europe in ashes needing to rebuild everything...same for Japan and Korea. The only country with the capacity to provide supplies was the US, so we had the massive expansion in US industries. Once other countries caught up though, the world started getting a lot tougher for America. Luckily, it kept moving into other sectors via innovation. Unfortunately, most of these new sectors (Computers, BioTech, Finance, Robotics etc.) are just not as labor intensive so the benefits of economic growth are then limited to a few instead of many.
- dev1n 11y ago
  This is an excellent point. I think this definitely had a lot to do with it. Global demand was at an all time high and America certainly was one of a few nations who could provide the goods necessary for rebuilding. However I think we cannot ignore the fact that America itself was expanding. Demand within America was increasingly fueling GDP as our war-time infrastructure was converted to build materials for homes, highways and specifically cars. These industries are now mostly being reimagined off of American shores. The world is certainly getting tougher for American industries but I believe there is enough demand that exists within America that we could support ourselves more with "Made In America" goods than what we currently do. I have read adding tariffs to some goods made offshore by companies incorporated in America could help out our economy, thus preventing the flight of corporations and capital outside of American soil. America still throws a lot of weight around regarding global demand so if we can force American corporations to stay in America by tariffing goods they make offshore, I think we could effectively keep jobs here, thus generating stronger demand.

by dev1n 11y ago

pm90 11y ago

Maybe the reason for increasing prosperity was also the nature of economic expansion after WW2. Most of Europe in ashes needing to rebuild everything...same for Japan and Korea. The only country with the capacity to provide supplies was the US, so we had the massive expansion in US industries. Once other countries caught up though, the world started getting a lot tougher for America. Luckily, it kept moving into other sectors via innovation. Unfortunately, most of these new sectors (Computers, BioTech, Finance, Robotics etc.) are just not as labor intensive so the benefits of economic growth are then limited to a few instead of many.

dev1n 11y ago
This is an excellent point. I think this definitely had a lot to do with it. Global demand was at an all time high and America certainly was one of a few nations who could provide the goods necessary for rebuilding. However I think we cannot ignore the fact that America itself was expanding. Demand within America was increasingly fueling GDP as our war-time infrastructure was converted to build materials for homes, highways and specifically cars. These industries are now mostly being reimagined off of American shores. The world is certainly getting tougher for American industries but I believe there is enough demand that exists within America that we could support ourselves more with "Made In America" goods than what we currently do. I have read adding tariffs to some goods made offshore by companies incorporated in America could help out our economy, thus preventing the flight of corporations and capital outside of American soil. America still throws a lot of weight around regarding global demand so if we can force American corporations to stay in America by tariffing goods they make offshore, I think we could effectively keep jobs here, thus generating stronger demand.