Since these monetary/fiscal fixes (i.e. distortions) didn’t address the real issues, all they can possibly do is increase the magnitude of the next collapse.
by Charles Hugh Smith, OfTwoMinds.com:
For five long years, we have pursued the fantasy that we could return to “growth” without having to fix or change anything. The core policy of the fantasy is the consensus of “serious economists,” i.e. those accepted into the priesthood of PhD economists protected by academic tenure or state positions: what we suffered in 2009 was not the collapse of leveraged crony-state financialization but a temporary decline of “aggregate demand” and productive capacity.
The solution, the economic witch doctors asserted, was simple: replace temporarily slack private demand with government-funded demand (deficit spending) and flood the impaired financial system with liquidity (i.e. free money) and increase the incentives to borrow money.
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