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I seriously doubt the Obama administration will be able (let alone willing) to implement a bold enough tax policy to help the middle and lower income classes to get quickly out of their economic situation. That means the US are facing many years of very slow growth until these categories have gotten rid of their debt.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Wed Aug 19th, 2009 at 02:33:48 PM EST
Even more, income growth at a sufficiently rapid pace to get lower and middle income class Americans out of our economic situation based on the Old Energy Economy would risk another oil price shock, either via global oil demand or via a collapse of the US$.

This is the foundation of my argument for what I have been calling a "Brawny Recovery", a slower, income-led economy founded on restoring US public infrastructure investments to pre-Reagan norms while focusing the investment in building up capacities in the New Energy Economy to support complementary private investment in associated productive capacity.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Aug 21st, 2009 at 12:53:39 PM EST
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This is the foundation of my argument for what I have been calling a "Brawny Recovery", a slower, income-led economy founded on restoring US public infrastructure investments to pre-Reagan norms while focusing the investment in building up capacities in the New Energy Economy to support complementary private investment in associated productive capacity.

That is the only path out I can see.  But before we can effectively pursue that path it seems to me that we must deal with the overgrown financial sector.  If they are allowed to finance a "brawny recovery" it would likely be through a "brawny bubble"!  And that we don't need.

The wife had MSNBC on last night while I was in another room doing sink repair.  Talking about Bernanke's reappointment or replacement.  The usual hystronics.  Then I passed by and commented that what was needed was to get rid of Geithner and shut down Citi and other big banks.  "That is what they are saying,"  she responded, so I stopped and listened.  Sure enough one of their controversy bears was saying that some big banks would have to be "resolved." Having that said on MSNBC seems like a milestone.


"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Aug 21st, 2009 at 01:21:19 PM EST
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Yes, as you know, my argument for coping with the financial sector is bring the parts Main Street needs into receivership, with claim or credit to the original financial institution based on whether they had enough sound assets to bring the books of that part into a sound financial position, and then let the original financial institution go through ordinary bankruptcy.

OTOH, that plan is less likely to generate the contributions from the Finance industry that Obama's Hedge Fund wing of the Democratic party relies upon.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Aug 21st, 2009 at 05:51:02 PM EST
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