Thu, 24 Jan 2008

Understanding the Stimulus

Understand that money is a thing, a commodity, and has use attributes. Go read the link if you don't understand that. So, what is a recession (we don't call depressions depressions ever since the Awful Depression -- we call them recessions, but they're still the same thing)? People prefer holding money rather than buying whatever is available to them.

Giving people more money, ala the "stimulus" being contemplated, won't change their minds about holding money. Consider that people usually don't hold their money in a mattress, but instead put it in a bank. Also consider that the US government IS COMPLETELY BROKE. They are constantly borrowing money. Consequently, any money they spend is being borrowed. So, when people decide that they want to hold onto their money, and put it in a bank, the bank will invest its short-term cash in U.S. Government investment vehicles, and .... the U.S. Government is contemplating borrowing that money and giving it back to people. What are they going to do with it? Yep, put it back in the bank.

There is only one word to describe this fucktard idea: FUCKTARDED. Pardonez-moi french, but call a spade a spade. Stupid is as stupid does.

Posted [11:48] [Filed in: ] [permalink] [Google for the title] economics,finance,austrianeconomics,stimulus,interest [digg this]