Comments on: When the government spends $700 billion, you’ve just increased demand by $700 billion http://kaiyen.com/blog/2009/01/22/when-the-government-spends-700-billion-youve-just-increased-demand-by-700-billion/ Why have 10 blogs on specific topics when you can have just 1 with all kinds of random topics? Thu, 12 Jan 2012 05:17:57 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: kaiyen http://kaiyen.com/blog/2009/01/22/when-the-government-spends-700-billion-youve-just-increased-demand-by-700-billion/comment-page-1/#comment-396 kaiyen Fri, 23 Jan 2009 03:30:58 +0000 http://kaiyen.com/blog/?p=334#comment-396 The macro-economic response is that it doesn't matter whether people do realize how badly overstretched they were living or not. At least it doesn't matter right now. We need to implement something to control the labor market and to unlock the credit freeze. Our economy doesn't work without credit. Long term, yes, we need to prevent non-bank banks from existing (such as Lehman Brothers) and regulate the way loans are made. Personally, I wonder whether people will ever realize how badly overstretched they are. At least beyond the next bubble. As soon as the next boom comes around they will forget. The macro-economic response is that it doesn’t matter whether people do realize how badly overstretched they were living or not. At least it doesn’t matter right now. We need to implement something to control the labor market and to unlock the credit freeze. Our economy doesn’t work without credit. Long term, yes, we need to prevent non-bank banks from existing (such as Lehman Brothers) and regulate the way loans are made.

Personally, I wonder whether people will ever realize how badly overstretched they are. At least beyond the next bubble. As soon as the next boom comes around they will forget.

]]> By: Debbie http://kaiyen.com/blog/2009/01/22/when-the-government-spends-700-billion-youve-just-increased-demand-by-700-billion/comment-page-1/#comment-395 Debbie Fri, 23 Jan 2009 02:00:48 +0000 http://kaiyen.com/blog/?p=334#comment-395 I still don't like it. Either way, we're spending (or forgiving, in the form of tax credits) LOADS of money we just don't have. We already have a record deficit AND debt, and it's going to get much, much, MUCH worse in the future. People need to feel the pinch - a lot - so they realize how BADLY overstretched they've been living, because it's still a drop in the bucket compared to how overstretched our entire system is. I think we are not nearly out of the woods yet: our entire greatest danger is still a complete collapse of the entire world economic system in a spectacular, never-before-experienced chain reaction. I still don’t like it. Either way, we’re spending (or forgiving, in the form of tax credits) LOADS of money we just don’t have. We already have a record deficit AND debt, and it’s going to get much, much, MUCH worse in the future. People need to feel the pinch – a lot – so they realize how BADLY overstretched they’ve been living, because it’s still a drop in the bucket compared to how overstretched our entire system is. I think we are not nearly out of the woods yet: our entire greatest danger is still a complete collapse of the entire world economic system in a spectacular, never-before-experienced chain reaction.

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