Saturday, February 7, 2009
Investment, The Fallen
Why has investment fallen? There is a great fall in investment because those investments were bad, finance and housing number one among them. There is also a great fall in investments that while seemingly good in themselves were predicated on spending from the bad debt they created and from the false profits generated by them, cars and most consumer goods being among these. A false market was created and there was too much investment in these and now these must be written off. There is no lack of goods that more investment would solve but rather a surplus that cannot be afforded. Now there is some investment that can make sense, but this investment is innovative and risky. It is small and scattered. It takes time to develop and grow, and it is not in a position to help us much now. So now we have a long tough slog to write off bad debt, bad inventory, and bad investment. The best way to ease and hurry the process and reduce the overhang is more inflation to combat deflation. Debit cards are interchangeable with cash so that doesn't require more spending but more cash, a lot more cash, say $8000 per citizen, in people's hands is just what is needed. Debit cards may be a useful method of distribution though. They could be loaded quarterly until positive inflation and growth is sustained.