I often wonder whether history is worthwhile to learn, when the general attitude is indifference towards it. I am no expert in economics, but it is certainly an interest of mine. It is an interest I have studied in depth. I have read many books in the last few years on the history, theory, and mechanics of economics. Based on what I understand, the current economic crises is not all that different in its basic nature from previous periods of economic decline.
Severity is the most notable difference. The potential solution still appears to be the same to me. Based on history, government spending made to increase jobs or otherwise increase the income of people who will spend the money they earn, is the best method of jump-starting a stagnant economy.
The money is in the hands of the wrong people. Banks that won't give out loans, and wealthy individuals who won't spend their money giving people jobs, but just hoarding liquid assets, are the greatest threat to recovery. Recessions is defined by a period where there is not enough money chasing too many goods. By increasing the access to money of people who are likely to spend it, economic growth can be achieved again.
It is basic Keynesian economics. It has been around for over half a century. It worked in WWII, why wouldn't it work now. The problem is very similar, and something meaningful needs to be done.
Tuesday, 07 April 2009
♫ I once heard of a man who lived by the sea. He loved the ocean, the way it smelled, the sounds of the waves crashing against the sandy shores, the tasty meals he harvested from it. But, one day the sea destroyed him. In one giant wave it took his home and his life. The man forgot the dual nature of the sea; it gives and it takes.
