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Kasz216 on 07 February 2012
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Mr Khan said:
johnsobas said:
there is no recovery. Interest rates are at zero and there is a 15 trillion dollar deficit increasing 1.5 trillion per year. Trying to either raise interest rates or trying to bring the yearly deficit to 0 will implode the economy instantly. if you take 1.5 trillion dollars out of the economy that is 10% of the GDP, it will instantly implode. The economy is only being propped up by the fed and foreign governments stupid enough to loan us money. Obama refuses to decrease the deficit because the illusion of the recovering economy would be gone in an instant. If there was a true free market interest rates would have risen ages ago and nobody would have borrowed us any money because we can't pay it back.

Recession-curative fiscal policy is like physical therapy for recovery from a major injury. There is a point at which you pass a threshold and are then able to care for yourself again, and make yourself better under your own power (until the next injury), but if you take the therapy away prematurely, you'll just collapse back to zero. The problem is that you get used to the crutches or the wheelchair, and that is the danger to these solutions, that they are easy to vote for and easy to collapse into, though you are ultimately weaker because of it


I don't get this type of thinking... at least in regards to this type of recession.

This type of recession isn't physical.  There are no muscles to be relaxed back into place... it's not like a huge drought wiped out product.

Everything is there that once was, it's just not worth as much.

This recession is psychological, it's more akin to a "breakup" and realization that your back to your crappier single life.

All the stimulus and therapy is doing is trying to convince consumers that "Good days are back" or that "Good days will be back soon."   That our old girlfriend is coming back.

When the reality is, the good days are why we had the bad days, because we never put down the fundamentals to live at that high level, and things came crashing down to "real" valuation.  She doesn't want to come back, and won't, because while we were having fun, there was nothing substansive about the relationship.

The economy is slowley improving because more and more people are saying "Fuck it, clearly the old days aren't coming back, this is reality, so it's now or never."

And people are slowley building the fundamentals that didn't happen before.  More and more people have stopped putting off "pleasure buys" because they are realizing that a government fix-all was never in the cards to begin with... and they have to enjoy what they have now... but responsibly so they don't end up in the poor house.  (Fundamentals.)

Stock prices are actually making weekly gains, despite the fact that news is actually pretty grim at greece and the rest because "This is our market, it's what we're stuck with."

 

Paradoxicly, realizing your stuck in a crappy situation is the first step to getting out of said situation.