Article

2009-08-31 Economy

Liquidity Bubble's Impact on the Markets

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Posted by AzCat 2009-08-31 17:32|| || Front Page|| [3 views ] Top

#1 You can think of the economy as a momentum equation i.e. the mass of money times the money velocity (how fast we exchange it with each other).

We've got a money velocity problem, and they're trying to fix it by increasing the money volume! The trouble is that this is inflationary and inflation also destroys money velocity.

What's needed is simple. We need to remove barriers to people exchanging their time, that means cutting taxes on working, employing, profiting and spending.

Posted by Bright Pebbles 2009-08-31 18:41|| 2009-08-31 18:41|| Front Page Top

#2 "cutting taxes on working, employing, profiting and spending"

GFL on that one, BP. :-(

That's not even on the radar for the clowns in "charge"

Posted by Barbara Skolaut">Barbara Skolaut 2009-08-31 20:00|| 2009-08-31 20:00|| Front Page Top

#3 BP I'll see your conclusion and raise you one issue: the overbearing regulatory state. Cutting taxes is important, reversing the growth of the regulatory state is probably even more important.

Levy & Mellor in their recent book The Dirty Dozen counted 70,000 pages of new federal laws, rules & regulations vomited forth by our federal government in a 12 month period which (IIRC) ended in March, 2006. Layer on fifty state & thousands of local bureaucracies staffed by millions of government do-gooders and you've a recipe for entirely depleting the dynamism that for so long drove the US economy. Until and unless the regulatory state can be significantly rolled back I doubt we'll see that dynamism return.

Glenn Reynolds has a bit of commentary on the darker side of this problem over on Instapundit today. He and others are wondering about the selective enforcement of the laws now that there are enough laws to pretty much guarantee that every citizen is a criminal.

Posted by AzCat 2009-08-31 20:07|| 2009-08-31 20:07|| Front Page Top

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