Posts Tagged ‘stimulate’

“Take the word ‘stimulate,’ as in ‘stimulate the economy’.  Where did that term come from?  It really just means ‘print up money’.  But calling it what it is sounds bad.  Politicians don’t want to say ‘print money’.  So they use terms like ‘stimulate’ and ‘quantitative easing’ instead.” -Doug Casey

“The U.S. stimulates its people to buy more Chinese-made goods.  And China stimulates its manufacturers to make more stuff for people who can’t afford it.  Both are heading for trouble…. Americans are hooked on spending.  They consume their wealth…and more.” -Bill Bonner

Create Demand?

Posted: December 24, 2014 in Economics
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“But demand is a natural thing.  It comes about when people have earned money… and when they would rather buy something with that money than save it….  If you could really stimulate by creating phony demand, Argentina and Zimbabwe would have two of the world’s leading economies.” -Bill Bonner

While driving the long highways of America the other day, I thought I was going to have to pull my car over to keep from wrecking.  An “expert” on the radio declared that people must put their personal debt worries aside so that they could stimulate economic growth by spending more.  I thought I was going to swallow my tongue.  It’s no wonder our country has suffered through a huge debt crisis, and why there will certainly be another.

People were enticed into spending the equity in their homes in order to enjoy the American dream of having everything they wanted.  This created a huge boom in economic activity.  But, once this debt spending became maxed out the economy crashed, and crashed quickly.  If we as a society continue to fall into this type of unbridled spending, there will be nothing more than continued booms and busts.

So, now that people are gaining a step on their debt, the experts want them to spend with debt again.  Ludicrous!  Reasonable spending, with saved money, is what will help decrease the roller coaster ride we seem to find ourselves on.  Please people, listen to your own common sense instead of “experts”.