The (Nut-)Case for More Aggression
August 8, 2011 · Posted in Government
In The Great Depression 2.0 I wrote:
Once existing stimulus programs and credit expansion attempts subside, there won’t be much left to pick up the slack. The consumer won’t be able to go back to business as usual unless he goes through a long period of reduced consumption, deleveraging, and savings, a period during which the majority of production and spending inside the US will have to be focused on capital goods, so as to restore a balanced ratio between the production of consumer goods and the production of capital goods.
At the point when these government stimuli wind down, Keynesian clowns will be jumping out of the bushes left and right, and demand that the government take on more debt and spend more money.
I would like to submit this beautiful specimen as further evidence for my theory above:
I further said in that article:
But at some point their mindless tirades will no longer appeal to an overtaxed and overleveraged populace. Their ivory tower nonsense will be way too far detached from simple realities.
The Yahoo finance contributor commenting on the clown above writes:
And even though we have very little to show for all that spending, this PhD in economics from the University of Michigan thinks we have no choice but to spend even more.
… attitudes are changing. People are beginning recognize insane behavior for what it is: Doing the same thing over and over while expecting different outcomes.
Aggression solves no problems. It only aggravates and prolongs them.
I further said in that article I wrote about 2 years ago:
Any temporary recovery we witness now, is likely to be remembered as just that, a temporary phenomenon. All actions taken so far have set the perfect stage for a double dip recession of enormous proportions, the worst possible prolongation of the necessary correction.
Be my guest to compare that prediction with the events as they unfold in the coming years.