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So we got into this mess by Bush spending too much so we want to fix it by spending even more. Or is it we want to take this opportunity to take from those we believe don't deserve it ("the rich") and give it to those we believe deserve it more ( unions and government workers ). George Bush should be pleased that Obama has easily surpassed him as the worst president.
Mr. Reich is again right on: we have a demand problem, not a supply problem. Of course, as he also notes this isn't our only problem, but it is one of the most misunderstood, and frequently misrepresented, by the know-nothing right.
"Given the low cost of borrowing -- the 10-year treasury (bond interest rate) is 2 percent -- that makes a lot of sense" Anyone who would loan their money to the US government at 2% for ten years needs their head examined.
Let demand be what people can afford to spend? Well, I think that number would be zero for the vast majority of Americans now. So tell me how that would save the economy?
Yeah, we're deeply in debt. I'm obese. The US should borrow even more money, and I need a bacon cheeseburger with fries. Who cares about tomoorow?
"The only way to increase demand is to put more money into the hands of the masses, so they can spend it."
What makes you think people don't have money to spend? A simple Google search will provide you with many reliable sources that show that people are saving and/or paying down debt, both of which are actually good, but also contributing to the lack of demand. People were scared by politicians that they were going to lose their jobs and that the economy was about to tank. People listened, quit spending and demand dropped. The Democrats should have been more careful when they decided to use fear as a tactic to win an election - it worked too well.
"A simple Google search will provide you with many reliable sources that show that people are saving and/or paying down debt, both of which are actually good, but also contributing to the lack of demand."--oreganojoe
Certainly this an additional factor, further exacerbating the sharp rise in unemployment and underemployment. You could add in rising health care costs and a few other things as well. The point is still that demand neads to increase in order to break the grip of recession, and the private sector is sitting on the sidelines until it does. This brings us right back to Reich's assertion that "Gov't needs to be the spender of last resort" to get things moving.
"Government is the spender of last resort." -- Hahahahahahahaha ... tell me another one, Mr. Secretary. We got into this mess because BOTH parties made government the spender of FIRST resort.
lostinstpaul--Google "businesses stockpiling cash" and you can spend the next several days reading articles from every major newspaper in the U.S. detailing this phenomenon.
lostinstpaul--sheesh, OK, here you go: http://www.marketwatch.com/story/dow-companies-stockpile-more-cash-2011-08-10 This is from the ultra-conservative Wall Street Journal's "Marketwatch" web-subsidiary site, dated 8-10-11, and begins with, "A MarketWatch and FactSet Research review of second-quarter regulatory filings shows that as of June 30, the overall amount of cash and short-term investments for 24 of the 30 companies that make up the Dow Jones Industrial Average had surged 18% to $256 billion from a year ago." It goes on to cite several specific companies and the never-before-seen amounts of cash they have stockpiled. This was the very first article that popped up when doing the aforementioned "businesses stockpiling cash: Google search, followed by dozens more. Is there anything else I can help you with?
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