Re: causes of the depression

On Fri, 02 May 2008 22:02:06 -0700, Ron Peterson wrote:

> On May 2, 1:12 pm, orangata...@[EMAIL PROTECTED]
 wrote:
> 
>> It has long been recognised that deflation is the main cause of
>> recessions and depressions.
> 
> What causes deflation? And, how do you know that?

Deflation is caused by the clumping of money into the hands of people who
have no real use for it.  In "kinder" terms it is caused by too much
saving. In the case of the American economy the "savings" are in the form
of government backed T-bills and other financial instruments that
typically draw "interest" and place a load on the economy that produces no
output.  Such a condition is the result of government spending such as the
Iraq occupation (which produces no infrastructure improvements that would
have created a return in the form of increased real output) while failing
to tax appropriately so as to recover the excess spending.

-- 
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend