So let me get this clear. You are stating the cause and continuing issues we have are due to social services?
To answer your question; on both sides of the pond the US and the UK are trying to get
1. demand in the economy moving &
2. get banks lending to business again as before
Based on all the trillions of billions pumped in either via bailout or QE this hasn't materialised in the last 3-4 years. Has it?
Why do you think that is the case?
Because as per the BoE QE explanation outlined (as per link posted by NT) the transmission mechanism isn't taking a year or two. Not even three.
Reason is based on common sense.
A. Economic activity leads to increased frequency of transactions exchanged and thus increase in money supply.
my fix: increased money demand actually, and at a fixed level of money supply nominal interest rate should increase
B. Any freaking twit who thinks by increasing the supply of money via loose monetary policy one can get economic activity ie frequency of economic transactions going is well deluded to say the best. You can pull a string but pushing it is a whole different kettle of fish. You capiche?
my fix: increase money supply which puts downward pressure on interest rates which should lead to an increase in consumption and in an open economy should lead to a currency depreciation thus improve the trade balance (assuming the marshall lerner condition holds)
I've been trying to figure out the transmission mechanism and other than a few wishy washy statements about replacing paper assets with liquid cash - will get big corporates to spend more money is a load of ********.
If there is no demand and stagnating economic activity why should business invest in expanding output capacity or produce more? You get the picture? Why should banks lend if the books don't add up?
The whole economics is screwed up and makes no freaking sense. All you so called experts and well reasoned and seasoned clever cloggs can obviously see what's right and what's wrong but I don't?
So when you give money to people who already have it they squander it on holidays and expensive purchase items like cars and boats more often than not made abroad so the Balance of Payments deteriates.
When you give money to nurses and dustmen and the low end of the society they spend it on essential items and what they need.
On balance if you want more demand you distribute money to those who don't have it so they can spend.
my fix: no no and no, "distributions" such as welfare payments do not affect demand, government spending does. govt spending is the govt buying goods and services not handing out cash
You give it to well endowed people in the hope they'll do something clever and invest - is just hoping on an ideal outcome which will not happen any time soon. When it does it will be because rest of global economy will finally pull out and we will follow.
Reason why Europe doing better than UK is because their labour and social policies prevent the mass unemployment and firing of staff for short term corporate gain. This is precisely why Germany, France and Italy are doing better than the UK.
Don't forget after Greece, UK is 2nd debtor nation in terms of GDP.
Now there is no socialism here just pure common sense. Cameron said he will keep front line services and better manage civil service without labours quangos.
What we are seeing is the reduction in front line services and having not renewed quangos contracts and after some redundancies news is out the Tory party have hired 3 times the number released.
So go figure the sums.
I'm getting tired of all you bright monkies - I've made my point. Time will tell and show the outcome of these short sighted, biased and skewed policies.
Life is a beach and then one drowns.
Enjoy the swim whilst it lasts.
