Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The maasive increase in aggregate demand is only happening because companies don't have the confidence or the credit to invest, and are instead cutting back on costs - which means trimming workforces, which in turn means that employees are paying down debts and saving rather than spending.

None of this is inevitable. Loosening lending will go a long way towards fixing it, and since private banks would rather waste cash on end-of-the-world bonus payments than lend it sensibly, government intervention is the only rational option.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jan 22nd, 2009 at 12:50:20 PM EST
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