Comments on carefully selected garbage: Whose Fault Is It Anyway?

Hi, SCO. It's a timing thing. Companies holdin...

2011-01-24T18:17:19.065-05:00

Hi, SCO. It's a timing thing. Companies holding cash is a response to "the deepest financial crisis in decades," as your link has it. The crisis came before the cash-holding. (And the excessive accumulation of debt came before the crisis, sez I.)

It may be that companies went into debt to get the cash they want to hold. Again, your link: "While renewed confidence in corporate-bond markets has allowed big companies to raise a record amount of money, many are still hesitant to spend the cash..."

Also, all those people who took out mortgages that became unaffordable when the economy went south... Those people owe a lot of that private-sector debt.

But I don't blame borrowers. I don't even blame lenders. I blame the policy-makers who spent the last 60 years taking money out of circulation (to fight inflation) with one hand and with the other, encouraging credit-use to help our economy grow.

I was having a rough day at work, but at break time I saw your reply to my remark and it cheered me up. I am always ready to yak about the economy.

@Arthurian. Interesting suggestion. Some might que...

2011-01-24T13:42:05.446-05:00

@Arthurian. Interesting suggestion. Some might question how an excessive accumulation of private-sector debt qua debt is responsible for the economic downturn when U.S. companies are holding more cash in the bank than at any point on record.

Hello. NextBlog brought me here. You write: The...

2011-01-23T20:44:06.570-05:00
Hello. NextBlog brought me here. You write:
The truth is, the economy has been bad for a couple of years, and it remains in pretty fragile shape. As for whose fault that is? To quote every lawyer in history: "It's complicated."

The truth is, the economy has been bad for four decades. And, since the purpose of economic policy is to guide economic performance, policymakers are at fault. But the problem is not government spending.

The problem is the excessive accumulation of private-sector debt.

Art

I utterly love this post! Keep up the good work my...

2010-11-07T00:15:18.348-04:00
I utterly love this post! Keep up the good work my friend!