Reinflating the economy - use your imagination ! / New Green Deals the answer or just fiddling around the edges ?

Auditor #9 wrote:

I'm not sure if printing leads to inflation all the time. I'm sure it does eventually if relied on continuously but could it be done in any controlled way in like little squirts to get the lubrication going and the economy gently inflated then allowed to settle and then .. Squirt! another dart of dough and so on until some stage is reached where the kick start kicks in and then off it goes by itself then again.

Oh well the degree of printing determines the strength to which inflation responds. Indeed if the economy is sufficiently slackened, the boost created by the printing is simply absorbed by the economy and doesn't translate into rising prices. This would usually happen in an economy with something like 20% unemployment. Businesses would use the extra cash simply hiring up that pool of people than leading to a situation where prices would rise.

I don't discount this lever of monetary policy being used as part of a mixture of various economic measures to get an economy out of a slump, but the quantative easing as that which seems likely, would lead to quite a degree of inflation.

This paper money won't solve a thing. There are fundamental problems of a collapsed rate of profit. We are its seems on a global basis too good at producing stuff: people don't have enough money to buy what is produced, so they borrowed to buy when credit was available. The whole thing was compounded by concentration of profits into a small number of hands - these people were simply not able to spend and recirculate as much as they were able to acquire for themselves.

cactus flower wrote:

This paper money won't solve a thing. There are fundamental problems of a collapsed rate of profit. We are its seems on a global basis too good at producing stuff: people don't have enough money to buy what is produced, so they borrowed to buy when credit was available. The whole thing was compounded by concentration of profits into a small number of hands - these people were simply not able to spend and recirculate as much as they were able to acquire for themselves.

Well that competes for post of the month imo - why can't I say it as simply as that ? I think it's absolutely true and half the reason I called this place 'Machine Nation' the first day.

Ard Taoiseach I'm surprised even shocked you thought the content of this thread was the same as the economic recovery one. Ok that's hyperbole but they are initially diametrically opposed unless Zhou has something specific in mind. His thread could be in the vein of textbook economics where recovery means more production and more consumption in a framework of natural supply and demand. At present there seems to be an oversupply of stuff - gas, oil, cars, houses but no credit so there is actually tons of wealth around but no means of distributing it. It's feckin hilarious. Is there demand, should there be demand, what kind of demand should there be (environment, culture and resources in mind) ??

Quantitative easing ...

The Bearded fella has been doing a few videos on the New New Deal - American Communism or Socialism in effect or at least more Hoover Dams and public works projects.

He describes the picture so far of the world economy (my version borrowed from Peter Schiff) : 6 Asians and 1 American on an island. The Asians have various jobs - collecting food, fishing, housing etc. while the American's job is to eat loads of the stuff and just leave some behind for the others to live on so they can do their usual jobs the next day.

This is an illustration but is not entirely inappropriate because the American economy is consumer-based and is tied into a bizarre dance with the rest of the world where production is seen as healthy and under-production and under consumption seen as crash economics and Great Depression Land etc. but this is really not true; humans need little to survive or indeed thrive yet we put our faith in increasing consumption and increasing growth as the be-all and end-all of proper economics. Neither people or nature can take it forever as we saw on the Race Conditon thread and indeed it's perhaps a welcome slowdown in over-pressurized resources and over-pressurized people which might be our salvation if Global Warming is indeed caused by the type of CO2-producing economic activity we've been into upto now.

Even if Global Warming is just a myth, our Celtic Tiger lifestyle was becoming unsustainable; prices were mental and people had even become impatient and ignorant assholes because of it and lost much of their graciousness and politeness, something which might return along with reduced economic activity, an observation which Justine McCarthy ended her Tribune article, A Very Middle Class Recession with yesterday.

Any ideas for what should replace it, or what will or any views on how Obama's version of the New Deal might impact on our futures if anything ? Will he just go to war for example or is there something that can be done on a global scale though avoiding war, not that I think it's on the horizon ?

11 minutes of Nick, the Beardy Guy