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79. Re: Out of the Blue Nov 8, 2012, 23:05 Bhruic
Mashiki Amiketo wrote on Nov 8, 2012, 14:10:
Sure, but here's the thing. The US like Europe are in liquidity traps. Neither the US or Europe have actually cut spending to any manageable level. What you've done is kept spending or actually increased spending, while trimming off the friday night fast food fries from the meal. Then after feeling good from scarfing down the triple decker mc suck burger you went out and bought a $2500 plasma TV. And on saturday, you paid for that TV by shifting your debt across three different credit cards.

And you're damn lucky they are, because that's the way to get out of a recession. What you seem to be advocating for, actually reducing spending, is the worst way to try and get out. Because when everyone does it, purchasing goes down. When purchasing goes down, production has to go down. When production goes down, the raw goods suppliers slow down. And at every stage along the way you have people either layed off, or reduced hours. So unemployment skyrockets, more people can't even afford to buy necessities, welfare increases, which puts a higher demand on government spending at a time when they are taking in less money because tax revenue is down because people aren't working. Which just causes the spiral to continue and deepen.

I suppose there are worse ways to try and fight a recession - having everyone take their money and burn it, perhaps - but not many.
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