Comment 75913

By A Smith (anonymous) | Posted April 13, 2012 at 13:51:42 in reply to Comment 75866

You say that printing money has been disastrous. But, in reality, that's how our economy works. Look at your money, its "printed" from paper.

The trick is to print just enough money so that our economy is vibrant and producing lots of jobs.

In recessions, people/businesses slow their spending/investment and start saving their "printed" money. Whether they do this out of fear of losing a job, losing customers, or rising bank debt, the net result is that less goods and services are bought and produced. This leads to job losses.

In order to counteract this contraction in spending, federal governments should use the power to "print" money to offset the increased savings desire of the private sector. In this way, the federal government acts as a thermostat ensuring that spendable cash, stays somewhat constant.

When governments talk about the need to tightening our belts, they don't understand that money is not the same as wealth. Money is paper, wealth is production. What drives production? SALES. Without sales, business don't have the funds to build.

What drives sales? Customers with cash.

So, what are the feds doing to increase consumer cash? Nothing. In fact, they are more focused on cutting the deficit, which means that they want to see higher tax collections from consumers.

How will draining cash from consumers help create jobs?

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