Replies

"Are we in agreement. Money into consumers hands is the solution. The question is....How do we get that money there. I propose that it's already there and in stead of confiscating it, the consumer needs to be allowed to put it to work."

I am not so sure. If this were a variation of LS's argument which reduced to its simpliest form is that the government should find some way to print the money and hand it to consuming spenders, no.

However one of the main structural causes of our problems is that taxes are too high--way too high; at every level. Further, the government wastes a large portion of the money. So If you reduce taxes, that obviously is a step toward a solution.

Observe also that the collapse of the Soviet Union resulted from governments control of an estimated 76% of the total economy. If you include actual tax financed spending at all levels plus spending that results from government control dictates; and spending (like houses and house construction; lake the auto industry) that results from controls related to government financing, you might conclude that we are over 50%, maybe 60%.

Another principal cause is our monetary system--we don't have a stable monetary system--my own personal view is that collapse of the derivative markets may well result in destruction of the value of our currency.

I am not so sure. If this were a variation of LS's argument which reduced to its simpliest form is that the government should find some way to print the money and hand it to consuming spenders, no.

Not a variation of LS and I agree with what you say. The main argument that I put forth is not to print money but to take away functions restricting and eliminating actual consumer cash and the arbitrary and artificial mechanisms of Gov & Fed that further schew and destroy the natural economic forces.

I believe we all agree that the Fed caused the bubble and in trying to now reinflate is causing further problems, deflation, more debt. They are printing money and that is not inflating anything but the qty of dollars through more debt which obviously is creating more debt, dropping the interest rate, creating a bigger spread on rates which is hurting corporate bonds and their ratings. What we are getting right how is lower rates, lower dollar exchange rates, dollar devaluation, lower confidence in the dollar and deflation (no one has any cash they feel is discretionary nor are there any places to confidently invest).

The only sector the Fed is enhancing is real estate which has an inverted direct effect with respect to interest rate.