Keynesian Fiscal Stimulus

[RichardAWilson]

The solution for capitalism has become a problem in itself. America, Japan and certain sections of the European Union are running massive and unsustainable fiscal imbalances. The (EU) is even discussing budgeting restriction. In America, the Republicans are pushing a Constitutional Law.:blink: The traditional solution of lowering taxes, borrowing and spending isn't working. For one, we remain too indebted to consume more. For another, Keynesian fiscal policies work better in closed-economies. In our economy, the stimulus will "leak" to China, the Arabs, India and Mexico. The same can be said of Supply Side Stimulus, which often has been leaked to China, India and Mexico. America, Britain, Greece and Spain will need a flood of new business spending and industrial (demand). Consumer & fiscal borrowing and spending won't be enough to restore moderate growth.

[RGacky3]

In the US a short term solution would be making it a closed economy through tarriffs and so on, they need to raise taxes, especially ont things that won't stimulate the economy (capital gains, high income and so on).

In the long term obviously the system cannot work.

[RichardAWilson]

I agree there. I happen to like Warren Buffet's answer to the trade problem (certificates that would be traded between importers and exporters). I think this is the only viable short-term solution.