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I could almost tolerate that big deficit IF I were somewhat confident that the money being spent had a reasonably good chance of turning the economy around. But the overriding theme of most economists I hear on MSNBC these days is that nobody really knows how to pull the economy out of its current recession. Most people agree that the Keynesian theory of spending government money to stimulate the economy doesn't consistently work. On the other hand, even Greenspan has admitted recently that the free market cannot be relied upon to correct itself. Once again, our banking system and Wall Street have failed us because the lessons learned from the last great Depression were forgotten. "Over exuberant" leveraging by investment banks, coupled with irrational speculation in real estate have resulted in the loss of tens of trillions of dollars of net worth from the economy when the housing bubble burst. While the cause of the economic downturn can perhaps be identified with some confidence, economists are truly baffled by how to fix the problem. Once the economy starts to fall because of imprudent banking practices, the problem quickly spreads to all areas of the economy. Suddenly, irrational factors such as fear and uncertainty begin to fuel the recession. The problem can no longer be fixed by any infusion of government money. Rather, people must begin to regain confidence that the economy will once again prosper. And as of the 21st century, neither economist or psychologist has figured out a way to stop the mob mentality.Basically, we've got ourselves in one hellofa mess with no solution on the horizon.
I could almost tolerate that big deficit IF I were somewhat confident that the money being spent had a reasonably good chance of turning the economy around. But the overriding theme of most economists I hear on MSNBC these days is that nobody really knows how to pull the economy out of its current recession. Most people agree that the Keynesian theory of spending government money to stimulate the economy doesn't consistently work. On the other hand, even Greenspan has admitted recently that the free market cannot be relied upon to correct itself.
Once again, our banking system and Wall Street have failed us because the lessons learned from the last great Depression were forgotten. "Over exuberant" leveraging by investment banks, coupled with irrational speculation in real estate have resulted in the loss of tens of trillions of dollars of net worth from the economy when the housing bubble burst.
While the cause of the economic downturn can perhaps be identified with some confidence, economists are truly baffled by how to fix the problem. Once the economy starts to fall because of imprudent banking practices, the problem quickly spreads to all areas of the economy. Suddenly, irrational factors such as fear and uncertainty begin to fuel the recession. The problem can no longer be fixed by any infusion of government money. Rather, people must begin to regain confidence that the economy will once again prosper. And as of the 21st century, neither economist or psychologist has figured out a way to stop the mob mentality.
Basically, we've got ourselves in one hellofa mess with no solution on the horizon.
