Quote:
Originally Posted by thommy
you can help an unhealthy economy for a short while with cheap interest and more credit - that is a fact and it was done to get out of the crisis.
BUT - it have a high price later on.
no matter if one lives under a bridge or in wonderland castle - everyone have limits and sooner or later they are reached.
than is the time to pay back. and not only pay back the money also the interest on top.
these repayments reduce the PREVIOUS existing purchase budget and do not flow into the market until the debt has been repaid (what can be years or decades)
when tens of millions do that, the domestic economy lacks demand.
first the rate of inflation falls.
then inflation turns into deflation.
and a deflation costs a lot of jobs because deflation is a sign of a lack of demand and therefore leads to a reduction of production.
for less production, fewer workers are needed.
the open secret of every economy is to maintain balance.
either trump never learned that or he ignores it because he knows that this effect can last long enough to catch his successor. the stupid people won't blame him then - just like they don't blame obama for the trend, what was just continued by trump for a while, in an exaggerated way, and completely shifted the balance in a boom phase.
this bill will not only be expensive - I fear it will become unaffordable.
|
Both Republicans and Democrats were in the rooms where the bank bailout decisions were made, so the basics shouldn't be something where people get all crazy partisan about it.
Access to capital was cut extremely deeply at the time of the bank bailout -- the beginning of the economic pain felt all over America. This was because the terms of the bailout required this of the banks.
Big banks got TARP money, while small family banks, more likely to know their customers, were left to fold.
People could no longer get mortgages, credit cards were turned off, home equity lines of credit were turned off, business lines of credit were cut, etc.
Then (and partisan blame is more reasonable here) Operation Choke Point was put into effect, which even more greatly reduced access to capital across a number of industries, both directly through bank denials and indirectly through efforts against payday loans, shadow banks, and crowdfunding. The Trump administration canceled Operation Choke Point, most likely more out of sympathy for the firearms industry than for adult or crowdfunded artists, but they did cancel it.