Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
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
[ Parent ]

Others have rated this comment as follows:

Display:

Occasional Series