We would all like a speedy recovery to the economy, but I'm afraid it just ain't realistic. It'll take years, folks, perhaps many years.
Why? Because the cause of the problems was debt, and every time it started acting up, the goverments and banks (surely with the backing of the emotional response of the public) tried to fix it with, what? More debt. And now the whole thing is collapsing.
It's like you built a big house without adequate support structure, merely cheap board all through the walls. And the walls rotted, and what did you do? You slapped more cheap boards over them. And the same next time, and next. And now the point is reached where the house is collapsing under each own weight, and we're trying to control the collapse.
We may or may not be able to, but the fact remains that what looked like a big impressive house was made of cards, and if we want a similarly sized house, and one which will last, we will need a sound structure from the ground up. A structure of production, not debt. And that takes time. You can create "a billion dollars" out of thin air, but you can't create "ten new factories and educated workers" out of thin air.
5 comments:
Very well said, Eolake.
What would you think of a company which has trillions (USA) or billions (Germany) of dollars/Euros of debt, even though there's regular monthly cash inflow????
Not much thinking, I guess, the company would vanish, vaporize in the cruel but just market environment, before you could even formulate a thought.
Bah, and the state leaders (I'll call them janitors) still go on and on and on, shedding their monthly regular income (= our taxes) not only into all possible directions, but also out of the window, in heaps!
OUR MONEY!!! But they themselves are still well off, with all those bonuses which WE PAY THEM!
All this is topped by their accusing real life CEOs of getting those (economically totally irrelevant, but symbolically important) bonuses.
Ok, that's it. I'll stop here. I don't want to ruin my day.
But think about it!!
Let's say that the real world economy grows at three percent a year. In the past few years, the economy has been recording numbers that are much higher than that.
The numbers were not based on real growth, they were based on speculation, bubbles, lies, call it what you will.
What is happening now is that all of the pretend value of the world economy that has built up is coming out.
Yep, it has to fall down at least to base line of the long term trend.
Thinking we can spend ourselves out of debt has to be one of the greatest self-deceptions of all times.
The real problem, however, is that the people who are running the US now are using the crisis as an excuse to push their agenda, and debt be damned. They don't seem to understand, or care about, the fact that they're going to double the national debt over the next five years.
I have one question for these folks... who's going to pay for this? (I know the answer -- we are -- but the politicians who signed us up for this need to be held responsible.)
Post a Comment