Keith Evans
Jul 30, 2017 · 1 min read

A prolonged anemia of currency in the economy will naturally lead to leveraging of private debt, which is the stuff bubbles are made of. Moving money from your savings account to your checking account doesn’t, however, increase your liquidity. Dependence upon monetary policy to overcome inept fiscal policy management has its limitations, but that is largely lost on the investment class that treats a half point of interest as its lifeblood instead of supporting the economy that enabled their investments.

The crash of ‘07-’08 had its roots in the Clinton “surplus” and the resulting private debt bubble that was further enabled by his acceptance of dangerous deregulation of investment banking. This is supported by the evidence of six of the only seven successful attempts to “balance” the budget that resulted in depressions. The great ’08 recession would have also qualified as a depression if it wasn’t mitigated by massive deficit spending. I think the evidence is in, and its obvious that deficits are not only beneficial, but necessary to our economy. It is the accounting methodology, not spending, that poses the greatest risk to prosperity.

    Keith Evans

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    Meandering to a different drummer.