Aug 11, 2011 6:03 PM GMT
Joseph Stiglitz's 4-Point Plan For Fixing The Economy
metta8 saidSo what would it take to get our government to implement some of this?
Putting Americans back to work will be the hardest. The corporations could bring more jobs back to the US if they had better tax breaks. The downside is we will be paying more for goods. Goodbye Wal-Mart.
http://online.wsj.com/article/SB10001424053111904006104576500690012110476.html?mod=googlenews_wsjNon-financial companies in the Standard & Poor's 500-stock index were holding $1.12 trillion in cash and short-term investments in their most recent reports, up 59% from $703 billion in the third quarter of 2008. Those stockpiles are providing companies with a cushion of comfort amid the economic and market turmoil.
http://cebviews.com/2011/08/08/us-economy-escaping-the-liquidity-trap/In the liquidity trap, both corporations and households need cash and liquid assets, such as treasuries, to shore up their balance sheets. Corporations accumulate cash by cutting costs and fixed capital investment. Households reduce private consumption. But private consumption and investment are major components of aggregate spending. When they fall and remain low, the result is a depressed macroeconomic environment. Economic growth is sluggish and volatile, because it hinges on the remaining components of aggregate spending – government expenditures, changes in inventories and net exports. With high unemployment and low capacity utilization there is no upward pressure on wages, and inflation remains low, creating a potential for dangerous deflation. Finally, a preference for liquidity generates demand for dollars and US government debt, keeping bond prices high, interest rates low, and exchange rates sound.
http://www.nytimes.com/2011/08/12/opinion/the-hijacked-crisis.html?_r=1&partner=rssnyt&emc=rssFor the fact is that right now the economy desperately needs a short-run fix. When you’re bleeding profusely from an open wound, you want a doctor who binds that wound up, not a doctor who lectures you on the importance of maintaining a healthy lifestyle as you get older. When millions of willing and able workers are unemployed, and economic potential is going to waste to the tune of almost $1 trillion a year, you want policy makers who work on a fast recovery, not people who lecture you on the need for long-run fiscal sustainability.
Unfortunately, giving lectures on long-run fiscal sustainability is a fashionable Washington pastime; it’s what people who want to sound serious do to demonstrate their seriousness. So when the crisis struck and led to big budget deficits — because that’s what happens when the economy shrinks and revenue plunges — many members of our policy elite were all too eager to seize on those deficits as an excuse to change the subject from jobs to their favorite hobbyhorse. And the economy continued to bleed.
What would a real response to our problems involve? First of all, it would involve more, not less, government spending for the time being — with mass unemployment and incredibly low borrowing costs, we should be rebuilding our schools, our roads, our water systems and more. It would involve aggressive moves to reduce household debt via mortgage forgiveness and refinancing. And it would involve an all-out effort by the Federal Reserve to get the economy moving, with the deliberate goal of generating higher inflation to help alleviate debt problems.
The usual suspects will, of course, denounce such ideas as irresponsible. But you know what’s really irresponsible? Hijacking the debate over a crisis to push for the same things you were advocating before the crisis, and letting the economy continue to bleed.
southbeach1500 saidmetta8 saidSo what would it take to get our government to implement some of this?
Returning the Democrats to power in the House.
And if we do, the collapse of the country will be complete.
What he's proposing is "more taxes" and "more government spending" which we've been doing since Mr. Obama took office almost 3 years ago and it doesn't work.
I guess if you're clueless, you get a Nobel Prize these days...