The Life and Death of an Economy
umair haque

While I agree with you the U.S. economy is dead, I disagree on why. I think it was dead here quite some time before the Lehman collapse, but that was one of the first signs that nobody could deny.

If you have assets, things are wonderful. Your house and the stock market are piggy banks, and as they print money, you automatically have more.

The printed money isn’t making its way into the real economy, which is why the prices of household goods haven’t been rising as quickly as real asset prices.

If you give a billionaire more money, he doesn’t suddenly start going out to eat more or buy another car. He buys stock or investment property, their prices go up, and he makes even more money in his sleep while people without assets try to grab on.

If you don’t have assets, your landlord figures out they can raise the rent because their property is worth more, and eventually you need to move the kids into a shared bedroom to cut costs and pay the same rent because the needle hasn’t moved on your salary in years.

I agree in real terms the national debt doesn’t much matter because the interest rate is less than inflation, but no amount of government spending will offset the money printing and the demand for real assets it’s creating. That’s why people can’t afford assets, and giving them government money won’t solve that problem.

From what I’ve read, for Main Street to have a chance again, there would have to be a reckoning on Wall Street, and they won’t let that happen.

Like what you read? Give Mark H a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.