Tuesday, October 4, 2011

Spend, Spend, Spend

There is only one way out of the global recession, and government must lead the way.

As the economic slump that began in 2007 continues, the question persists: Why? Unless we have a better understanding of the causes of the crisis, we can’t implement an effective recovery strategy. So far, we have neither.
We were told that this was a financial crisis, so governments on both sides of the Atlantic focused on the banks. Stimulus programs were sold as being a temporary palliative, needed to bridge the gap until the financial sector recovered and private lending resumed. But, while bank profitability and bonuses have returned, lending has not recovered, despite record-low long- and short-term interest rates.

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