This page has been archived and commenting is disabled.

Why Isn't Monetary Pumping Helping the Economy?

Tyler Durden's picture


Submitted by Frank Shostak via the Ludwig von Mises Institute,

Despite all the massive monetary pumping over the past six years and the lowering of interest rates to almost zero most commentators have expressed disappointment with the pace of economic growth. For instance, the yearly rate of growth of the European Monetary Union (EMU) real GDP fell to 0.7 percent in Q2 from 0.9 percent in the previous quarter. In Q1 2007 the yearly rate of growth stood at 3.7 percent. In Japan the yearly rate of growth of real GDP fell to 0 percent in Q2 from 2.7 percent in Q1 and 5.8 percent in Q3 2010.

In the US the yearly rate of growth of real GDP stood at 2.4 percent in Q2 against 1.9 percent in the prior quarter. Note that since Q1 2010 the rate of growth followed a sideways path of around 2.2 percent. The exception is the UK where the growth momentum of GDP shows strengthening with the yearly rate of growth closing at 3.1 percent in Q2 from 3 percent in Q1. Observe however, that the yearly rate of growth in Q3 2007 stood at 4.3 percent.

In addition to still-subdued economic activity most central bankers are concerned with the weakness of workers earnings.

Some of them are puzzled that despite injecting trillions of dollars into the financial system so little of it is showing up in workers earnings.

After all, it is held, the higher the earnings, the more consumers can spend and consequently, the stronger the economic growth is going to be.

The yearly rate of growth of US average hourly earnings stood at 2 percent in July against 3.9 percent in June 2007. In the EMU the yearly rate of growth of weekly earnings plunged to 1.3 percent in Q1 from 5.4 percent in Q2 2009. In the UK the yearly rate of growth of average weekly earnings fell to 0.7 percent in June this year from 5 percent in August 2007.

According to Vice Chairman of the US Federal Reserve Stanley Fischer, the US and global recoveries have been “disappointing” so far and may point to a permanent downshift in economic potential. Fisher has suggested that a slowing productivity could be an important factor behind all this.

That a fall in the productivity of workers could be an important factor is a good beginning in trying to establish what is really happening. It is however, just the identification of a symptom - it is not the cause of the problem.

Now, higher wages are possible if workers’ contribution to the generation of real wealth is expanding. The more a particular worker generates, as far as real wealth is concerned, the more he/she can demand in terms of wages.

An important factor that permits a worker to lift productivity is the magnitude and the quality of the infrastructure that is available to him. With better tools and machinery more output per hour can be generated and hence higher wages can be paid.

It is by allocating a larger slice out of a given pool of real wealth toward the build-up and the enhancement of the infrastructure that more capital goods per worker emerges (more tools and machinery per worker) and this sets the platform for higher worker productivity and hence to an expansion in real wealth and thus lifts prospects for higher wages. (With better infrastructure workers can now produce more goods and services.)

The key factors that undermine the expansion in the capital goods per worker are an ever expanding government and loose monetary policies of the central bank. According to the popular view, what drives the economy is the demand for goods and services.

If, for whatever reasons, insufficient demand emerges it is the role of the government and the central bank to strengthen the demand to keep the economy going, so it is held. There is, however, no independent category such as demand that drives an economy. Every demand must be funded by a previous production of wealth. By producing something useful to other individuals, an individual can exercise a demand for other useful goods.

Any policy, which artificially boosts demand, leads to consumption that is not backed up by a previous production of wealth. For instance, monetary pumping that is supposedly aimed at lifting the economy in fact generates activities that cannot support themselves. This means that their existence is only possible by diverting real wealth from wealth generators.

Printing presses set in motion an exchange of nothing for something. Note that a monetary pumping sets a platform for various non-productive or bubble activities — instead of wealth being used to fund the expansion of a wealth generating infrastructure, the monetary pumping channels wealth toward wealth squandering activities.

This means that monetary pumping leads to the squandering of real wealth. Similarly a policy of artificially lowering interest rates in order to boost demand in fact provides support for various non-productive activities that in a free market environment would never emerge.

We suggest that the longer central banks worldwide persist with their loose monetary policies the greater the risk of severely damaging the wealth-generating process is. This in turn raises the likelihood of a prolonged stagnation.

All this however, can be reversed by shrinking the size of the government and by the closure of all the loopholes of the monetary expansion. Obviously a tighter fiscal and monetary stance is going to hurt various non-productive activities.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 08/26/2014 - 16:35 | 5146451 Chupacabra-322
Chupacabra-322's picture

Why? It's one huge Ponzi. That's why.

Tue, 08/26/2014 - 16:46 | 5146474 AssFire
AssFire's picture

Exactly my mangy coyote, if every nation moves in the same direction (debasing and inflating)- the perspective, without a reference value (gold) remains unchanged.

Eventually, the crap on the banks' books (those removed from mark to market) will actually match the number on the books... or so they hope.

Tue, 08/26/2014 - 16:47 | 5146497 knukles
knukles's picture

Because we're in a Liquidity Trap.

Tue, 08/26/2014 - 16:50 | 5146516 Publicus
Publicus's picture

Because the cash is not given directly to the people. Instead, it is given to the rich.

Tue, 08/26/2014 - 16:52 | 5146529 linniepar
linniepar's picture

Audit, then end the fed. Return the power back to the people.

Tue, 08/26/2014 - 17:22 | 5146677 wallstreetapost...
wallstreetaposteriori's picture

Simple answer..  The two are completely unrelated.

Wed, 08/27/2014 - 00:36 | 5147999 AldousHuxley
AldousHuxley's picture

Because all of that money goes straight back to the banks in the form of mortgages.


unlike sector specific recession, housing bust is the most problematic because money printing goes to save overvalued assets on paper and not into production of new goods.


BUILD TWICE AS MANY HOMES and you will see middle class spend again.

Tue, 08/26/2014 - 17:23 | 5146681 sosoome
sosoome's picture

Too simplistic. End the fed and congress will just take over. There is a reason the FRA, the 16th, and 17th amendments were enacted in unison.

Tue, 08/26/2014 - 17:33 | 5146720 negative rates
negative rates's picture

End the Fed and then pass a bill that makes congressmen do their own taxes. Who needs a system so complicated that our best and brightest (supposedly), can't even do their own taxes. Fair tax bitches, right after the constitutional convention and default on our debt of course.

Tue, 08/26/2014 - 17:40 | 5146769 sosoome
sosoome's picture

" Fair Tax" does nothing to stop the profligate spending and insane money-go-round.

Tax the states, as the Constitution allows, and restore state representation in Congress. Fair and flat tax schemes merely reshuffle the chairs on the Titanic.

Tue, 08/26/2014 - 17:55 | 5146836 negative rates
negative rates's picture

No it doesn't, but the constitutional convention and default will easily solve that.

Tue, 08/26/2014 - 17:21 | 5146668 ebworthen
ebworthen's picture

Yup.  Pushing on a string doesn't work. 

Janet, where is my $3 Million tax free?

Tue, 08/26/2014 - 17:21 | 5146667 Pairadimes
Pairadimes's picture

Er, could it be because currency is not money? Or maybe because we are trying to fix a solvency problem with liquidity? Or because our semantics are fucked up, and what we are really doing is pumping debt into an already insolvent economy? Or possibly because the patient is too far gone for any heroic measures? But by all means, don't let that stop you.

Tue, 08/26/2014 - 17:55 | 5146835 shovelhead
shovelhead's picture

I'm sure they can unwind trillions of derivatives, stop QE and raise interest rates without any problem.

It's just a matter of concentration.

Then we can focus on 6% growth.

Problem solved.

Tue, 08/26/2014 - 17:29 | 5146704 negative rates
negative rates's picture

And how many Queens does it take to screw in a light blub?

Tue, 08/26/2014 - 16:49 | 5146515 SAT 800
SAT 800's picture

Why should monetary pumping help the economy? The whole idea is ridiculous to begin with. It's like praying to goat bones over a campfire to make it rain. Completely false theorey; useless; junk economics. You can't "help" an economy by making more currency units; surely that's obvious.

Tue, 08/26/2014 - 16:54 | 5146530 NOTaREALmerican
NOTaREALmerican's picture

Well...   It worked for half a century.    How could something that worked so well, suddenly stop working?  

Tue, 08/26/2014 - 17:37 | 5146749 Creepy A. Cracker
Creepy A. Cracker's picture

Because praying to goat bones over a campfire to make it rain has an expiration date.  Printing money has never worked over any reasonable period of time.  It, like we are seeing, only boosts some sectors for them to come crashing down when reality strikes.

Tue, 08/26/2014 - 16:36 | 5146453 gdiamond22
gdiamond22's picture

It's not supposed to help the economy;it's supposed to help those closest to the spicket

Tue, 08/26/2014 - 16:53 | 5146534 linniepar
linniepar's picture

Spigot, but it's all good. A great trivia question!

Tue, 08/26/2014 - 17:06 | 5146597 gdiamond22
gdiamond22's picture

Well played. It seems QE has been detrimental to my purchasing power and brain utilization.

Tue, 08/26/2014 - 16:37 | 5146458 josephpetronyc
josephpetronyc's picture

the robot are taking all the jobs , and the rich people or anyone with 1/2 a brain is holding or hilding there money

Tue, 08/26/2014 - 16:52 | 5146526 Dapper Dan
Dapper Dan's picture

 possible not a spelling error after all.


hilding [hil-ding] /?h?l d??/ SpellSyllables


noun, Archaic.
a contemptible person.
Tue, 08/26/2014 - 17:43 | 5146793 BandGap
BandGap's picture

Uh, sure. "there" money.

all your robot are belong to us.

Tue, 08/26/2014 - 16:39 | 5146466 NOTaREALmerican
NOTaREALmerican's picture

Re: The more a particular worker generates, as far as real wealth is concerned, the more he/she can demand in terms of wages.

Funny one,  but (regardless of the above humor) why do people keep saying the economy isn't improving?   How GOOD, exactly, can the economy get?    Everybody, I know is doing better than ever.  

Tue, 08/26/2014 - 16:56 | 5146544 linniepar
linniepar's picture

The labor participation rate could be better, historically speaking.

Tue, 08/26/2014 - 17:00 | 5146564 NOTaREALmerican
NOTaREALmerican's picture

Yeah,  but,  really?   What are they going to that we don't already have done?    They aren't exactly starving to death.  So,  why rock the boat. 

Tue, 08/26/2014 - 17:07 | 5146603 linniepar
linniepar's picture

ANYTHING productive. 

Tue, 08/26/2014 - 17:09 | 5146612 silverer
silverer's picture

I knew this country was in for a bad ride when I heard three or four years back that for the first time in history, the U.S. worker suffered a decrease in productivity.  To get a report like this, and continue to add debt, means it is impossible to 'grow out of' the debt and the policy makers had to know this.  But Americans are those trusting, ever optimistic people that 'believe in America'.  They wave their little flags at parades and pick their kids up high so they don't miss the propaganda, and the abuse goes on...

Tue, 08/26/2014 - 18:27 | 5146914 Escrava Isaura
Escrava Isaura's picture

That's right, girlfriend,

72% of this country believes in Angels.

But, decrease in productivity in the last four years?

Are you kidding us?

Otherwise, you have lots of catching up to do.

Tue, 08/26/2014 - 23:32 | 5147854 The Most Intere...
The Most Interesting Frog in the World's picture

ZH should raise it's standards. You haven't made one coherent comment since you have been on here. Please do yourself and your country a favor by placing a shotgun under your chin and pulling the trigger. Shit, you might fuck that up. I know, jump from at least a 20 story building. Even someone as stupid as you couldn't screw that up. You could be like a suicide bomber for stupid people but instead of killing yourself and other people you would just kill yourself, and still get all the glory ;)

Wed, 08/27/2014 - 02:04 | 5148139 AssFire
AssFire's picture

it is a bot; nobody here responds to it... it will leave.

Wed, 08/27/2014 - 02:04 | 5148140 AssFire
AssFire's picture

that being said, I hate that cunt.

Wed, 08/27/2014 - 19:46 | 5151781 Escrava Isaura
Escrava Isaura's picture

The Most Intere..., AssFire,

silverer wrote:

“I heard three or four years back that for the first time in history, the U.S. worker suffered a decrease in productivity.”  

US productivity and wealth, COMPARED to the rest of the world, peaked in 1945. It started declining in 1949, and not 4 years ago.


Then, she added: “Americans are those ever optimistic people wave their little flags at parades and pick their kids up high so they don't miss the propaganda, and the abuse goes on...”

In a nation that 72% believe in angels, picking their kids up high so they don’t miss the propaganda should not come as a surprise. Silverer should expect it!


Tue, 08/26/2014 - 23:21 | 5147817 The Most Intere...
The Most Interesting Frog in the World's picture

You may not be a real American, but you are a real dumbass.

Tue, 08/26/2014 - 16:38 | 5146467 world_debt_slave
world_debt_slave's picture

pumped to the 1% and vacuumed from the rest

Tue, 08/26/2014 - 16:39 | 5146468 carbonmutant
carbonmutant's picture

Not designed to help the economy. It's designed to transfer control...

Tue, 08/26/2014 - 16:40 | 5146475 Bay of Pigs
Bay of Pigs's picture

Prolonged stagnation? How about a hyperinflationary Greater Depression with WWIII thrown in for good measure?

That's where we are headed.

Tue, 08/26/2014 - 18:01 | 5146853 shovelhead
shovelhead's picture

At least it's a comfort to know we're heading somewhere rather than bumping around aimlessly to a slow death.

There's always a silver lining.

Tue, 08/26/2014 - 16:48 | 5146478 Dr. Engali
Dr. Engali's picture

A lot of useless words when it all comes down to the fact that those closest to the printing presses get the benefit. By the time it trickles down to us, our buying power is inflated away. It amazes me how nobody ever addresses the debt and the over capacity we have in every sector of the economy, including labor which we allow to flow freely over the border and outsourcing the rest.

Tue, 08/26/2014 - 16:50 | 5146517 Bay of Pigs
Bay of Pigs's picture

+1 Doc

Central Banks are the scourge of humanity, and have been for hundreds of years.

Tue, 08/26/2014 - 18:05 | 5146856 Escrava Isaura
Escrava Isaura's picture

Dr. Engali

You wrote: "A lot of useless words..."

Not, if the goal is to brainwash.


Then, you have, the ‘Well Indoctrinated’ -- brainwashed

Bay of Pigs

"Central Banks are the scourge of humanity"

Pigs, you have no clue about what you are talking about


Tue, 08/26/2014 - 18:09 | 5146873 shovelhead
shovelhead's picture

Cheer up Doc...

When that trickle becomes a tsunami because the world rejects holding dollars, you'll look back and think these were the good old days.

We'll be mulching those dollars to make fire logs to keep warm.

Tue, 08/26/2014 - 16:46 | 5146499 Rainman
Rainman's picture

easy ... monetary pumping is greasing the squeaky rickety wheels of the debt train. Nothing moves when that train stops.

Tue, 08/26/2014 - 16:48 | 5146500 ejmoosa
ejmoosa's picture

It's a less than zero sum game.  For every dollar injected, there's more than a dollars worth of malinvestment and ineffective production.

Bad and worthless investments are worse than no investment at all.  That's because the real businesses have to compete against the subsidized ones....and that destroys their true potential.

Tue, 08/26/2014 - 18:13 | 5146882 shovelhead
shovelhead's picture

Even a bad investment is good with free money if you can afford to wait.

You don't get free money?

Well then, I can see your point.

Tue, 08/26/2014 - 16:48 | 5146506 wmbz
wmbz's picture

How can there be anyone left in this world who can even remotely believe that central banks/planners would ever change the course they have been on. Not going to happen period! These mother fuckers will print, lie, cheat, steal, commit fraud,etc... until the bitter end. That's what they do and have been doing for decades. Screw the serfs, it's easy and they are too damn stupid to understand just how stupid they are.  There will be no "change" until this son of a bitching system blows up.

Tue, 08/26/2014 - 16:56 | 5146543 NOTaREALmerican
NOTaREALmerican's picture

Re:  How can there be anyone left in this world who can even remotely believe that central banks/planners would ever change the course they have been on.

I think the trusting people who generally trust the smarter people would tend to think that most people are just trying their best.  

Tue, 08/26/2014 - 16:49 | 5146510 roadhazard
roadhazard's picture


Because like all "trickle down" it doesn't.

Tue, 08/26/2014 - 16:49 | 5146518 tgatliff
tgatliff's picture

Most people know what the problem is and know exactly how to fix it.  The problem is that the remaining people are in on the game and have no real desire to change it.  


The real issue, IMO, is that producing a real economy takes time and doesnt fit into short election cycle time frames.  Also, politicians do not get elected by doing the right thing.  They get elected by making the economy look good while they are in office.  Ronald Reagen is a good example of this.   People endlessly talk about "morning again in America" and endless other phrases and talk about how good things were during his time.  However, what his administrations policies unleashed (looking at you Greenspan) is what we are dealing with now.

Real productive economies is not easy.  It requires people that get rewarded for actually doing and building things that create real productive advantages (aka time savings and/or technological advantage).  In the short term, it is always allot easier to create an asset based economy and pass inflated money back and forth between each other and talk about how smart the most leveraged players are.

Tue, 08/26/2014 - 18:27 | 5146919 shovelhead
shovelhead's picture

One thing you can say about Reagan.

He was exceptionally good at picking the absolute worst people to run his administation while thinking that they were doing what he wanted them to do.

He tried to run the Presidency like the Governors office where the people you pick are on your side.

Fatal mistake. Good intentions without a sharp throat cutting knife will get you nowhere.

Tue, 08/26/2014 - 21:57 | 5147528 daveO
daveO's picture

His biggedt mistake was made before he even went into office. It was when he accepted GHWB as running mate at the threats made by the head of the CFR. He almost died thanks to it. 

Tue, 08/26/2014 - 21:54 | 5147522 daveO
daveO's picture

Greenspan went into office in 1987, six years into Reagan's tenure. Greenspan had written a defense of the gold standard in 1966, 19 years before. Greenspan immediately raised rates and cratered the market. Then, he spent the rest of his tenure doing just the opposite, juicing the market with low rates. He was smart enough to know who was paying his check. It wasn't Reagan or any other politician.

Tue, 08/26/2014 - 16:52 | 5146527 Jack Burton
Jack Burton's picture

"any policy, which artificially boosts demand, leads to consumption that is not backed up by a previous production of wealth. This means that monetary pumping leads to the squandering of real wealth."

I love the simplicity of this simple fact of economic life, something the Administration and it's Banker Buddies just can't seem to accept. Probably because they end up with all the cash, while broader society in which people work and run prductive business do not benefit in any way. The Federal Reserve is the headquarters of the liars and crooks who foment these policies of money printing, ZIRP and Liquidity induced asset bubbles.

These people have been at work since 2008 to cure the economic fiscal crisis of 2008, Yet, we are set up for an even worse crisis soon.

Tue, 08/26/2014 - 18:09 | 5146874 Escrava Isaura
Escrava Isaura's picture

Sorry to have to disagree with you Jack, but,

About 70% of US economy is not production, but consumption.


That's why it needs lots of credit.


Tue, 08/26/2014 - 19:57 | 5147190 JuliaS
JuliaS's picture

50%+ consumption annually cannot be sustained for over 30 years unless there's some funny business going on. Math doesn't do magic. The magic here is us exporting non-redeemable pertrodollars to segregate foreign trade volume associated directly and indirectly with the oil trade. While the rest of the world consumes more oil per year, the outflow of dollars is guaranteed, and we can actually afford to receive 70% of something while hardly giving 30% of anything.

The only point where this consumer model collapses is when something happens to the oil trade - say, when it goes through a $147 a barrel shock and then deflates, sending an influx of cash back home, where it causes the largest credit market, namely the housing sector, to overheat and implode, giving birth to a chain reaction further propagating through every smaller credit branch.

But we experience deflation, instead of inflation! How can that be! Well, remember that money coming back to the bank - returning loans, actually destroy cash. When cash comes home out of foreign circulation, we - Americans, end up with less cash to spend! Now isn't that ironic!

Tue, 08/26/2014 - 16:54 | 5146537 Dr. Engali
Dr. Engali's picture

Why on earth do these pundits ever believe that monetary policy is supposed to help the economy? Central banks exist for the benefit of the banks and to transfer wealth upwards....... Period. The 1% can control the rest by enslaving the nation with debt.

Tue, 08/26/2014 - 16:59 | 5146552 NOTaREALmerican
NOTaREALmerican's picture

It think the people that trust other people would not believe that what you say is systemic to the entire system.   Surely, they are just trying to do their best

Tue, 08/26/2014 - 17:00 | 5146560 BlackVoid
BlackVoid's picture


Net energy available in most countries is falling. An energy shortage cannot be cured by monetary or social solutions.

Tue, 08/26/2014 - 18:36 | 5146952 shovelhead
shovelhead's picture

Sure it can.

The prices go up and those who can afford it get it.

Same as any other scarce resource.

Do you have a gold shirt like that Indian guy?

Tue, 08/26/2014 - 17:04 | 5146584 blu
blu's picture

Monetary pumping was about the economy? Well shut my mouth, all this time I thought it was about the TBTF banks.

They must think we're stupid. Economy. Yeah right. You funny.

Tue, 08/26/2014 - 17:07 | 5146598 Duc888
Duc888's picture

....because it's debt.

Tue, 08/26/2014 - 17:20 | 5146629 OC Sure
OC Sure's picture

...because it's bad debt.

In a Full Reserve Banking system, good debt is represented by money, the money represents the product of work, the work is necessary to meet the demands of living. Most importantly, any currency loaned is represented by work that has already been performed.

In a Fractional Reserve system, bad debt is represented by counterfeit, the counterfeit represents the absence of product, the absence of product represents the impersonation of work, the impersonation of work represents the necessity to steal to meet the demands of living. Most of the currency loaned is represented by work that is expected to be performed.

The former is honest banking and promotes genuine wealth creation and productive growth. The latter is dishonest and fosters an environment for the "people to become so corrupted as to need despotic government, being incapable of any other."

Tue, 08/26/2014 - 18:20 | 5146900 Escrava Isaura
Escrava Isaura's picture

OC Sure,

Then, how about shadow banking?

Private lending?

Wed, 08/27/2014 - 10:15 | 5148933 OC Sure
OC Sure's picture

Apply the First Principle of Money to each example. That is to identify if the currency which is mediating the exchange is provided as a result of productive work or was it simply conjured?

Shadow banking then is an example of dishonest lending due to its reconjuring of the first conjuring machinations. The transaction is upside down as the numerator of loans facilitated is much larger than the denominator of actual wealth availible that is supposed to support the loans.

Private lending then is an example of honest banking due to its common sense, self regulation, of the loaner's incentive to not loan more then they can afford to lose. To minimize the risk involved, the lender wants to maintain a smaller numerator than the denominator.

Tue, 08/26/2014 - 21:44 | 5147482 daveO
daveO's picture

Slavery by another name. It's why student loans can't be discharged anymore in bankruptcy. The slaves are gonna be in debt their whole lives, anyway... 

Tue, 08/26/2014 - 17:32 | 5146717 yrbmegr
yrbmegr's picture

To a hammer, everything looks like a nail.

Tue, 08/26/2014 - 18:45 | 5146971 himaroid
himaroid's picture

Credit market trillions. QE billions. Gonna need a bigger dick.

Tue, 08/26/2014 - 19:00 | 5146992 socalbeach
socalbeach's picture

If monetary pumping helped national economies, Zimbabwe would be the world's leading economic power, and Gideon Gono would be a household name..

Tue, 08/26/2014 - 22:10 | 5147574 The Most Intere...
The Most Interesting Frog in the World's picture

Great point and would be a great question at a Fed Reserve news conference. "Mr Yellen, if monetary pumping was such a great idea, why is Zimbabwe not an economic powerhouse right now?"

Tue, 08/26/2014 - 23:01 | 5147753 venturen
venturen's picture

Because bankers have lost all moral direction. The group that are their now would sell their mothers to make a dime. They should have all been bankrupted in 2008! Will not end well. 

Tue, 08/26/2014 - 23:06 | 5147769 venturen
venturen's picture

The fix is simple....get rid of the wall street banker class! Bring back actual bankers...there is no useful purpose for high frequency trading(tax it) or a bank trading commodities or trading stocks. Let "banks" loan money and pay interest on savings. Let M&A banks do what they want with their own money....WITH NO GUARANTEES from any federal agency! You have guys making a billion doing nothing but staring at a screen and driving numbers up and down. When it goes wrong....the taxpayer guarantees the thieves bonus! 

Tue, 08/26/2014 - 23:14 | 5147794 AdvancingTime
AdvancingTime's picture

 We should understand that not confidence but demand drives investment, demand is the real driver. Lack of real growth is about lack of real demand. Much of the demand we see today is driven by artificially low interest rates and QE that distorts the markets.

 We must differentiate the kinds of economic growth and understand that all growth is not created equal. If you spend money but afterwards have little to show for it you have wasted it. Sadly, much of the money America "invests in itself" each year through government spending and programs falls into this category. More on the kind of growth we need in the article below.

Wed, 08/27/2014 - 06:33 | 5148303 Debugas
Debugas's picture

short answer - lack of payable demand

Do NOT follow this link or you will be banned from the site!