Angst in the United States - What's wrong with America's economy?(economist.com)
economist.com
Angst in the United States - What's wrong with America's economy?
http://www.economist.com/node/18620710
4 comments
This gives a good background:
The Secret of Oz:
http://www.youtube.com/watch?v=7qIhDdST27g
"No, today, in our crazy money system, the government has to borrow our money into existence and then pay interest on it. That's why they call it the National Debt. All our money is created out of debt. Politicians who focus on reducing the National Debt as an answer probably don't know what the National Debt really is. To reduce the National Debt would be to reduce our money -- and there's already too little of that."
"No, you have to go deeper. You have to get at the root of this problem or we're never going to fix this. The solution isn't new or radical. America used to do it. Politicians used to fight with big bankers over it. It's all in our history -- now sadly -- in the distant past.
The Secret of Oz:
http://www.youtube.com/watch?v=7qIhDdST27g
"No, today, in our crazy money system, the government has to borrow our money into existence and then pay interest on it. That's why they call it the National Debt. All our money is created out of debt. Politicians who focus on reducing the National Debt as an answer probably don't know what the National Debt really is. To reduce the National Debt would be to reduce our money -- and there's already too little of that."
"No, you have to go deeper. You have to get at the root of this problem or we're never going to fix this. The solution isn't new or radical. America used to do it. Politicians used to fight with big bankers over it. It's all in our history -- now sadly -- in the distant past.
> Both times the United States bounced back, boosted on the first occasion by Paul Volcker’s conquest of inflation and on the second by a productivity spurt that sent growth rates soaring in the mid-1990s even as Japan stalled.
In the late 1990s the usual chime was Robert Solow's observation that "computers show up everywhere but the productivity statistics". It wasn't until after 2001 that business investments in IT began to pay off in productivity growth (which became one of the dominant explanations for the jobless recovery at the time).
In the late 1990s the usual chime was Robert Solow's observation that "computers show up everywhere but the productivity statistics". It wasn't until after 2001 that business investments in IT began to pay off in productivity growth (which became one of the dominant explanations for the jobless recovery at the time).
All America's working capital is being hoarded outside the US economy by the rich. There's no capital left to flow the economy.
This is classic '70s stagflation (Phillips curve is again failing, inflation is not resulting in more jobs) for pretty much the same reasons, for those of us who were around back then and paying attention it's nothing new but roughly as unpleasant.
A lot of people think we've also reached a preference cascade as to the reason(s) but that's perhaps beyond the scope of this discussion.