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Why The World Is Still In Financial Crisis | Minyanville.com

Stimulus plans have failed because they only allocate funds to political cronies for projects that are unnecessary, and do nothing to reduce the debt burden on the households that drive the economy.

Central bank policies have failed, because all of their actions are aimed at making borrowing more attractive, but these policies do not address the fact that the citizens are not spending (and therefore not borrowing to finance their spending).  Because this economy has been structured to grow when spending and borrowing increases, we will not see meaningful growth until this happens.

If the aim is to have the consumer and debt expansion remain the drivers of our economy – and that is another topic altogether, but all actions by policy makers seem to support the current structure – meaningful growth will not be achieved in employment or GDP until the debt burdens on households is reduced.

via Why The World Is Still In Financial Crisis | The Economy | Minyanville.com.

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