Posted by Eden Prairie Viking on November 5, 2009, 10:40 am, in reply to "Re: There is a major correction coming."
government spending. Both spur growth and drive up the debt/deficit unless economic growth creates a situation where the aggregate tax proceeds exceed the decreased revenue of either decreased taxes or increased spending. Unfortunately under bush, we had both increase spending and decrease in taxes during a period of time where the economy didn't need either. Bush was playing his music at 10 and driving up the debt to record levels. HOwever, unlike Spinal Tap, there is not eleven on the amp. So, you end up adding another amp. Adding an additional amp is costly -Obama had to use a massive stimulus that drives up the debt but cushioned the steep economic dive we were experiencing.
Long term job growth will depend on two key factors. Confidence in the future and availability of credit. Unfortunately, it appears the financial sector wants to go back to the bush years of risky investments without securities. Of course, any attempt at regulating said entities will result in cries from republicans and conservatives as socialism while these companies line up the pocket of the same candidates for reelection.
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