freddyv wrote:AN excellent article at
http://seekingalpha.com/article/116371- ... b_articles...
The Paradox of Deficit Spending Bailouts and Stimulus Packages
I may be wrong in my thinking here but there appears to be a huge paradox at the heart of the stimulus packages and banking system bailouts aimed at generating economic activity and this is that the record amounts of new government debt issued has the effect of soaking up liquidity from the financial system i.e. the US is expected to issue $2 trillion of treasury bonds during 2009, how much of that $2 trillion would have gone into main street ?
Sounds like a good question to me.
My guess is that's the right question. As I said on Wednesday in the other thread,
In my opinon, bailouts in any form, printing money or otherwise, take capital from solvent, profit making enterprises and destroy it (meaning the capital), the profit making enterprises themselves and the livelihoods of the workers employed in them.
Like the survivors of the Great Depression used to say: There is no free lunch. Come to think of it, I haven't heard that phrase very much since about 1994.