Educating yourself about the events that lead up the GFC is definately an eye opener. I am currently writing my thesis and have just written a large comprehensive summary on the GFC and it all started with deregulation. Bernanke and the likes do not have a clue, sure fiscal stimulus got economies out of some tight situations back during the great depression, however it wasnt until 5 years later until after the stimulas spending was completed and actual policies came in to increase productivity of the work force spurred lower unemployment and growth; the real answer that needs to be done is cutting taxes and stimulating real demand and growth and letting all the institutions that are too big to fail fall. Fiscal stimulus only ends up with countries having unbelievable amounts of debt throughout the economy and there is always one question I have wanted an answer too, how do they pay governemtn stimulas debt back?
Let me explain, congress prints money and this money gets distributed to where ever needed in the economy, interest is then paid on this debt and assuming that the debt can be paid back what do they do with the money, burn it??? I doubt it; thus the debt and money supply remains the same in the country. If anyone has a great answer to this, it would be very interesting to here.
Nonetheless, how the U.S congress and world governments have handled this is an absolute joke. Read this article how sweeden managed there real estate crisis back in 1992; very very interesting to say the least.
