Larry Summers, neo-carmudgeon at large, held forth, warning a permanent slump is upon us. Forsooth and begorrah! Beggar me Larry.
Quoth the Krugman – Woe! ‘Tis lore!
The primary issue with QE is that loans are demand driven. You can’t push a rope. QE is the Fed doing its best to push a rope. Congress could pull on the rope, but it isn’t. So we are left with the Fed pushing on a rope. Pushing that rope has meant that the fattest fat-cats, right next to the money spigot of the Fed, grow fatter.
So spend more! Government spending pulls real economy activity, which creates a multiplier effect through loan demand by creating qualified borrowers. The Fed’s QE has been trying its best to push a rope. But the only reason the Fed has to do that is because of the cretinous congressional budget cutting.
Dear lord. What could be more obvious than that? Dear Larry. Never one to rock the boat or cut to the nub of a problem. It’s a fiat currency world. Keynes and all that.
Come on guys! Do something useful with your fame and Nobel Prize. Make it your life’s work to destroy that cretin, Grover Norquist. If you won’t speak up, what the hell do you expect!
No amount of jawboning, no amount of QE, no amount of anything can substitute for running that idiot Norquist into the deep dark hole he belongs in.