BoatShoes;858181 wrote:Uh huh sure ya didn't. We've been hearing that song and dance for almost five years now. Inflation and rate hikes are right around the corner!! Blah blah. Every Austerity/Deficit Guy has been proclaiming this from the mountains but the Hicks model says otherwise and has been vindicated. Here is the Wall Street Journal declaring the return of the Bond Vigilantes on May 29, 2009. The wrongness is palpable.
http://online.wsj.com/article/NA_WSJ_PUB:SB124347148949660783.html.
We can borrow money for free and put people to work who would otherwise be doing nothing and fix what the real problem is...lack of growth (which will really cause us long run deficit problems) but we will not because of problems that we don't have...the impending doom of inflation that doesn't exist gahhhh. They're coming! lol.
Why are food prices rising? Why on earth is oil over $80 when our private economy hasn't grown in 3 years? Is demand increasing? Of course not, so I guess that means the dollars buying those things aren't worth as much. You should hate inflation, because it is a tax on everyone, including the poorest Americans.
3.6% inflation with negative growth. I guess poor people are fortunate that this economy isn't going to grow any time soon.
The $1.5 trillion in borrowed money pumped into the economy lead to GDP growth of $400 billion. Even if we were borrowing for free (we aren't, and 2% of $1.5 trillion isn't a small number), that still isn't worth it. Keynesian spending has never stimulated real economic growth, ever. It props up the GDP numbers and gives some people temporary work and can help make economic downturns less miserable, but it does absolutely nothing to help the economy recover.
