Freedom, system thinking, politics, science, education, economics, pirates

Wednesday, 17 December 2008

What if we needed a recession to fix the excesses of the economy?

Andrew Lilico in today's Grauniad.   Are the Austrian school right? Is spending your way out of a recession impossible. 


  1. AL usually misses the point, but in answer to the question, yes, of course it is.

    A certain amount of gummint spending is essential and adds value (law and order, refuse collection) some is merely redistributive (welfare) but we are way beyond that stage, anything our gummint does on top is wealth destruction on a massive scale through total misdirection of resources.

  2. A recession removes the negative yields on the economy by bankrupting them.

    Nothing physically disappears, just the allocation changes.

    The economy IS desperately trying to boost the yield, but the politicians are seemingly doing everything possible to stop it. If they succeed we shall have a depression.

    If they print they shall impoverish savers, those in debt are already in trouble and printing will not really help them.