This presupposes that there is something effective they can do. The politicians have spread the fallacy that they can control the economy - history shows this is just talk.Are they in trouble? NO.
Inflation is on the rise; employment heading upwards; profits declining etc., yet the government and central bankers are in complete denial of the facts and as usual, are doing nothing whatsoever to prevent a slowdown or deeper financial carnage.
There are a number of options at their disposal but they may not be able to sell these ideas to the public. Look at the outcry at the measures taken by the Federal Reserve and the general derision that they are receiving from different quarters yet if they stand by and watch the financial system implode, they will be lambasted for doing nothing.This presupposes that there is something effective they can do. The politicians have spread the fallacy that they can control the economy - history shows this is just talk.
Sure, they can try all the above. But its just like anti-crime CCTV - it just moves the problem from one area to another. (Just like UK government now has a problem with size of incapacity register because it migrated loads of people from the unemployment register in order to fiddle the figures).There are a number of options at their disposal but they may not be able to sell these ideas to the public. Look at the outcry at the measures taken by the Federal Reserve and the general derision that they are receiving from different quarters yet if they stand by and watch the financial system implode, they will be lambasted for doing nothing.
Lower interst rates is the most widely used; repurchase of treasuries is another; currency devaluation (currently being used by the US and UK) are favoured options; tax rebates/refunds are another - these will be used extensively but denied in the coming weeks. Unfortunately, they have the negative effect of stoking inflation but it might well be the lesser of two evils.
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