This article was written back in early 2016, had been lifted from my blog. The lift from the blog left a lot of presentation errors, so I cleaned it up today, the text is unchanged from the original.
The big question is, how does our economy and the Global economy stop the deflation spiral that we are in ?
Bernanke and his trailing puppy Yellen,
have tried the route of QE, the expansion of Central Bank balance sheets which reached a critical level in September 2012, to little avail. Japan&Kuroda and Europes Draghi have tried to follow suit. &This has led to a headline on Bloomberg today, Bank of Japan may be reaching the technical limits of QE as it runs out of government bonds to buy.
So is there a Solution?
For me, if you are going to change the direction of Macro economics in a Global consumer economy, the money has to go to the base, not to the top. In Europe and in the US the approach of fiscal government has been a tightening. In the US the Republican Congress driven funds sequester has been the dominant economic factor over the past five years, basically the same has been true in Europe. So bottom line, the biggest issue is the fact that the Central Banks have had their hands tied and should have stood aside after saving the economy in 2009-2011, two years of cheap money was enough.
The markets and elected government
needed to take over at that point and they dropped the ball.
There are Choices
Which leads to the title, five people are running for President at the moment, Trump, Cruz, Kasich, Clinton, Sanders, and they have widely varying economic platforms. Keeping in mind that government debt is a long-term fiscal issue that is best dealt with by debt reduction during boom times and debt increases during slow times, the decision for your next president is made much easier. It is obvious that a major change in jump starting the economy is in order. The consumer needs to be recharged. Big changes in infrastructure, education and health funding are of first importance. And we are in a slow economy, real deflation, is closer than actual inflation. Your decision Please.