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Saturday, November 09, 2013

Don't Get Upset.... Get Motivated

 Mark Lester (who starred in Oliver) in Fahrenheit 451
 "Please, sir! May I have more Quantitative Easing?!"

The night when I went to see Ender's Game, I told my friend that my life was not winding down into calm retirement, and the reason was the time I was born. This was the friend whom I used to tell in the 1990's that misery was coming, so he expressed surprise that I had not yet been glutted by suffering and war and general bad things.

I said that I had had quite enough; Fate, however, still had the knuckle dusters on, even though recently She had put on some velvet gloves.

1) The US economy is addicted to the Fed's Quantitative Easing,

2) Unemployment is continuing and getting worse actually, when the people who no longer seek work are included,

3) Productive investments are still low; you can get all the gee-gaws and apps and gizmos you want, but new science and new industries are lacking.

Add to this the appalling facts that recently a political party ran a man for Vice President who espoused the philosophy of Ayn Rand (it was Paul Ryan), and Rand's philosophy is pretty much a combination of her hot pants mixed with conservative economics of the 1930's and a lot of atheism.
(Nobody seemed to care; just,like, have a man a heart beat away from the presidency who has a hot-pants-atheistic philosopher as an ideal.)

For people my age, all we can do is find a place of refuge, such as in Truffaut's Fahrenheit 451, where we shall remember as the snows begin. It is too late for a whole bunch of us, even beyond the Boomers.

Paul Krugman sums it up:
According to the paper (with the unassuming title “Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy”), our seemingly endless slump has done long-term damage through multiple channels. The long-term unemployed eventually come to be seen as unemployable; business investment lags thanks to weak sales; new businesses don’t get started; and existing businesses skimp on research and development.

What’s more, the authors — one of whom is the Federal Reserve Board’s director of research and statistics, so we’re not talking about obscure academics — put a number to these effects, and it’s terrifying. They suggest that economic weakness has already reduced America’s economic potential by around 7 percent, which means that it makes us poorer to the tune of more than $1 trillion a year. And we’re not talking about just one year’s losses, we’re talking about long-term damage: $1 trillion a year for multiple years. 


And it is, as I said, a bitter irony, because one main reason we’ve done so little about unemployment is the preaching of deficit scolds, who have wrapped themselves in the mantle of long-run responsibility — which they have managed to get identified in the public mind almost entirely with holding down government debt.

This never made sense even in its own terms. As some of us have tried to explain, debt, while it can pose problems, doesn’t make the nation poorer, because it’s money we owe to ourselves. Anyone who talks about how we’re borrowing from our children just hasn’t done the math. 

True, debt can indirectly make us poorer if deficits drive up interest rates and thereby discourage productive investment. But that hasn’t been happening. Instead, investment is low because of the economy’s weakness. And one of the main things keeping the economy weak is the depressing effect of cutbacks in public spending — especially, by the way, cuts in public investment — all justified in the name of protecting the future from the wildly exaggerated threat of excessive debt.

It is time to at least try to put out the fire!


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