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View Diary: "No is not an option" (156 comments)

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  •  OT: can you answer an econ question for me? (0+ / 0-)

    Sorry this is off-topic, but I'm noticing a new meme popping up among Republicans: "the economy needs to contract" in order to cure the evils of consumer over-indulgence, and what the stimulus does is just prop up this situation, temporarily.

    This sounds like rubbish to me , but can any of you give me a coherent counter argument based in macroeconomics?

    And didn't Hoover think along these same lines?

    •  Translation: (3+ / 0-)
      Recommended by:
      Uberbah, skohayes, NM Ward Chair

      We got ours and now we need to kick away the ladder so all the commoners stay commoners.

      And they said a black man would never be President.....

      by xxdr zombiexx on Wed Feb 11, 2009 at 02:51:09 PM PST

      [ Parent ]

    •  Hoover did not think along these lines (4+ / 0-)
      Recommended by:
      StrayCat, Uberbah, skohayes, NM Ward Chair

      He said things like "properity is around the corner" and other things to talk our way into recovery.  "The economy needs to contract" would be a new and in my opinion very dangerous thought.

      Contraction - raising interest rates, taxes, cutting government spending, can be appropriate when inflation is rampant and there is either excess demand or a shortage of supply.  But in this situation, it is a recipe for disaster.

      "We have always known that heedless self-interest was bad morals, now we know that it is bad economics." Franklin Delano Roosevelt, Jan. 20, 1937

      by Navy Vet Terp on Wed Feb 11, 2009 at 02:55:03 PM PST

      [ Parent ]

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