WHAT REALLY HOLDS THE ECONOMY BACK: G20 Channels Herbert Hoover - Up and Down Wall Street Daily - R. Forsyth - Barrons.com
The above article tries to suggest that developed country governments should continue deficit spending to spur growth; but, it ignores a key variable, which is to set in place the conditions that will make investors want to invest and for entrepreneurs to build businesses?
It also ignores the fact that governments have been piling on to the labor component of production costs (labor+raw materials+capital) additional charges that distort the labor component. Part of the distortion is to channel the fruits of labor to 'non-producers' (retirement benefits, etc.).
Thus, the government may be trying to get the economy going by borrowing; but, it is pushing on a string because of the road blocks and inhibitors of the fiscal policies and social policies that governments have created.
(Communism in Eastern Europe is an extreme example of what happens with out of control social policies in terms of dampening down economic activity.)
The drag of fiscally based tax and social policies needs to be addressed. The current government spending won't work (e.g. Pimco's 'new normal')
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