It can't. It may have a short term affect on the economy but we will eventually arrive at the same problem. The problem is wall street has an addiction. They're addicted to our credit. Reframe your understanding of dollars as physical bills and think of it as energy in time. The consumers have a finite current amount of energy. wall street , and I'm talking mutli-million businesses, harvest our energy through purchases and productivity- returning a small amount to us in wages. To increase their profit we are extended credit (there's the time factor). This increases the amount of energy they can harvest. Yet our wages remain relatively flat, or even decline through productivity. we are given every excuse and scapegoat in the world to blame, usually some form of ourselves, like we sue too much or the government is too big or we help the poor. But the real culprit (greed) goes unchecked.
This has been going on since the beginning of the industrial age. We entered WWII late to ensure our competitors countries would needed time to rebuild. This backfired. We never had to rebuild (aside from pearl harbor) significantly. This gave us a competitive edge. But for the last 50 years countries, their government, businesses, and people, have planned their economies and rebuilt. Now they create goods and services on par with our quality. Often even better. The US views planned economies as socialistic. The problem is it costs $$, which takes away from profits.
For the last 50 some years the US has increased productivity, minimized as many expenses as possible (preferably pushing them to the consumer/labor), increased labor supply (women and immigration), and decreased living wages. It's pretty rare that a company has maintained it's world-wide competitiveness. computer, software, some high tech goods and services are competitive- but the rest of the world is catching up and on our heels. we have lost to most other categories. look on the shelves of department stores, wal mart, fred meyer etc. Hardly any goods are american.
Because we are less competitive- comsumer/labor is giving its few dollars to competitors. Meanwhile credit is reaching its peak. This plateau, from loss of revenue to competition, hitting colective credit maximum, and declining growth of productivity (the difference spikes through time, but is probably in decline now) forces the governments intervention.
since wall street is addicted to money that isn't there (our credit- money in the future), and wall street won't extend credit/we're tapped out, government has to create credit. ?? what? government has to create credit. It feeds wall street by taxing us (money form the future aka credit) and giving it to wall street.I'm not a marxist or 100% socialist. But our form of capitalism is and always has been less about opportunities and more about domination. and now it's come to bite us in the butt.
Give Kudos Report Abuse
