| Akvod said:
It's a really simple model... just make the yellow line go to the left. What happens when less people are willing to buy at every price level? The price level goes down. Disinflation. What happens when the rate goes below 0%? Deflation. And what happens when there's deflation? Shit. |
WIth China, India, and Eastern Europe coming on line, there has been downward pressure being put on wages. You can look at wages for America actually being flat since the 1970s. This downward pressure has resulted in there being increases in productivity in America, but wages not keeping up. It causes prices to not go up. The likes of Walmart, which decided it wanted to incarnate itself as the marketplace, has drove down the costs of certain consumer goods. And there has been this spiral since 2000, where record productivity gains have resulted in more people getting laid off. This causes things to be in place no amount of money will fix. Oh, you can end up causing temporary economic activity, but to what end?
And this is what I am talking about. You will look for strong pressures from all over, that have trashed the sources of production of good and services, it is hard to get them back. What is needed is to build use useful goods and services, not things that are temporary.
See this video about what I am talking about. When you create an economy like this (see inner city), exactly how does this remain sustainable:
Look at what developed around the check cashing places. Really, an economy of selling bling is sustainable? How does throwing more money into this area make things better?
