[Winstonm]

http://www.bloomberg...video/74465608/

Richard Koo states that the U.S. is following the pattern of Japan's lost decade quite precisely, that the risk of an American "lost decade" is quite high, and he acknowledges that monetary policy from the central bank in this environment can no longer be effective. Only fiscal stimulus can help.

Fiscal stimulus? From this Congress?


As Morgan Freeman said in The Dark Knight: "Good luck with that."

[mike777]

Winston it is my understanding we are trying fiscal stimulus. We are running a budget deficit this year of around 1.5 trillion.

I believe in 2012 we will try another 1.1 trillion or so of stimulus/budget deficit.

[Winstonm]

mike777, on 2011-August-26, 15:41, said:

Winston it is my understanding we are trying fiscal stimulus. We are running a budget deficit this year of around 1.5 trillion.

I believe in 2012 we will try another 1.1 trillion or so of stimulus/budget deficit.

Hi, Mike,

Status quo is not a stimulus, even if it accomplished by deficit spending. But you knew that.

[mike777]

Winstonm, on 2011-August-26, 17:12, said:

Hi, Mike,

Status quo is not a stimulus, even if it accomplished by deficit spending. But you knew that.

Winston so we are going to spend roughly 3 trillion in deficit spending and it is not fiscal stimulus.

[Winstonm]

mike777, on 2011-August-26, 17:29, said:

Winston so we are going to spend roughly 3 trillion in deficit spending and it is not fiscal stimulus.

Mike,

Pouring 3 trillion into bomb craters in Afghanistan, Pakistan, Iraq, and Libya while continuing to spend on munitions more than the rest of the combined world because the contracts have been set in motion is not effective fiscal stimulus.

Effective fiscal stimulus only comes from giving people the incentive and the hope of recovery, a reason to spend what they earn instead of hoarding it by guaranteeing a job for the next 2 years rebuilding a bridge, and for the two years after that rebuilding airport runways, etc.

Deficit spending to maintain tax advantages primarily for the upper 5% can only contribute to increased asset price speculation - it does nothing for the real ecomony and may harm it by articically inflating hard assets.