A Very Good Article on the "Recovery" by Joel Geier

[RED DAVE]

A YEAR ago the world was 18 months into the worst economic crisis since the 1930s. The economy was still in “free fall.” The investment banks and the shadow banking system had collapsed, the commercial banks were dysfunctional, and many were going bankrupt. Credit, even lending between banks, was frozen. World industrial production plunged by 20 percent, as did world trade—a contraction only exceeded during the Great Depression. Nobody knew where the bottom was, and various catastrophists warned that there was no bottom in sight.

It was a serious question as to whether we were about to enter a crisis similar to the Great Depression of the 1930s. But the economy did hit bottom, and over the next several quarters there were increasing signs of a recovery, purchased by the largest financial bailout in world history. The United States and the world economy have been growing since August 2009, but with the exception of Asia and emerging markets, at anemic rates, particularly when judged by the many trillions of dollars governments have spent to produce this recovery.

Indeed, there is no confidence that recovery is sustainable without ongoing state stimulus; and yet the stimulus is producing deficit and debt problems that could trigger a new stage of the crisishttp://www.isreview.org/issues/71/rep-economy.shtml


RED DAVE

[S.Artesian]

"and yet the stimulus is producing deficit and debt problems that could trigger a new stage of the crisis"

What debt problems have the stimuli created? Greece's problems are not due to a stimulus program; neither are Spain's, Portugal's, Ireland's, Iceland's, the UK's, or the US's. And certainly not Germany's.

Stimulus program might be leading to problems in China, but even then the problems are not originating in the stimuli but in overproduction.

[RED DAVE]

The stimulus in the US, which created over a trillion dollars of debts, is leading to problems. Remember, the US is the largest cause of the crisis. The stimulus is causing the government to shrink all manner of programs, which are themselves stimuli of production, such as aid to education. This shrinkage will retard and could easily kill the recovery, resulting in more stimulus, more shrinkage of programs, etc.

Fun and games with the bourgeoisie.

RED DAVE

[S.Artesian]

That's not what Geier means when states the stimulus is creating debt and deficit problems. He means creating problems for the bourgeoisie in the making-money department.

The stimulus isn't leading to social programs being cut.

You actually believe that the stimulus is leading to the recovery being cut short? That's just baloney and parallels the bunk spewed out by "free marketeers" hedge fund managers, the Cato Institute etc.

The stimulus has created zippo problems for the bourgeoisie. I read Geier's article and there isn't one word in it about profit, profitability, overproductions-- nothing.

It's the same old, same old "left-monetarist" "fictitious capital" crap that has been played and replayed for 30 years now.

Not to put too fine a point on it...