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That is true, but if another deep recession occurs it could happen. Faced with large unemployment and stagnant economy politicians would do anything. And solvin
by yc1010 12y ago
That is true, but if another deep recession occurs it could happen. Faced with large unemployment and stagnant economy politicians would do anything. And solving 1) China 2)laundering corporations and 3) black economy in one go would seem like an attractive option, especially if it results in a huge surplus which could be used towards "job-creation" and "stimulus".
Hell a few years ago "magicking trillions of dollars" in the form of QE was unthinkable, yet it happened
http://i.imgur.com/1NnUxNU.png http://i.imgur.com/1NnUxNU.png
What is more remarkable is that it didn't lead to rampant inflation (yet?)
As for "taking money away" point, governments regularly do this thru' money printing.
- seanmcdirmid 12y agoBut the USA economy ATM is doing very well. Employment is still an issue, but that has more to do with more efficiency than morbid supply and demand. We buy as much from China as China from us, we are so intertwined that the USA or china pissing in either pot would just hurt each as much, if not more, than the other. >What is more remarkable is that it didn't lead to rampant inflation (yet?) Nobody but the libertarians (who don't really get economics) expected it to. A low amount of inflation is healthy given that it pushes people to spend or invest, not just sit on it.
- muraiki 12y agoI think that without a mechanism to transfer that QE into wages, price inflation cannot occur. If Joe Consumer as a whole has less dollars available (such as through unemployment, lack of raises, lower wages due to increased supply of workers, etc.), that decreases demand and thus acts a check against price inflation.