Quote:
Originally posted by marichiko
I suggest you study history. Consider the case of Germany after the First World War. That nation was saddled with huge reparations to pay the victors of the war and also suffered from the world wide economic depression of the 30's along with everyone else.
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The US is not paying massive reparations to other nations. However this economic situation you have defined occurred previously in the 1970s. No reparations. Just job loss compensated for by massive debt and a president whose solution was to have both 'guns and butter'. People kept working. But to punish an economy that was basically printing money, economics too appropriate revenge. Therefore we got something that should not happen - stagflation. And then even jobs were disappearing.
The prolem was solved when interest rates were run up approaching 20%. Only then was inflation eliminated. Ironic how many events of the 1960s are being repeated today. Hopefully someone remembers those lessons of history; we don't repeat the economic stagnation called he 70s.
In the meantime, post WWI Germany teaches us nothing.