Monday, October 05, 2009

Govt is the biggest cash hoarder

Part of the theory behind the stimulus was to rectify the "paradox of thrift" by spending when others are supposedly hoarding cash. But the government itself has ironically become a mega-hoarder of cash. They borrowed the funds --taking that money out of the economy-- and have been doling the dollars out slowly.

The stimulus has exacerbated the situation it was supposedly intended to rectify.

This is almost certainly not an original idea on my part, but I haven't seen it elsewhere.

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