Putting The Cart Before the Horse

[Kevin_Kennedy]

In his first televised speech before Congress, President Obama asserted that prosperity will return once the government restores the flow of credit in the economy. It may come as a surprise to him, but an economy cannot run on consumer loans. Furthermore, credit stopped flowing in the U.S. for a very good reason: there was no more savings left to loan. Government efforts to simply make credit available, without rebuilding productive capacity or increasing savings, are doomed to destroy what’s left of our economy.

The central tenets of Obamanomics appear to be that access to credit will enable people to borrow money to buy stuff, the spending will spur production and employment, and thus the economy will grow. It’s a neat and simple picture, but it has nothing whatsoever to do with how an economy works. The President does not understand that consumption is made possible by production and that credit is made possible by savings. The size and complexity of modern economies has obscured these simple concepts, but reducing the picture to a small scale can help clear away the fog.

Obama Puts the Economic Cart Before the Horse by Peter Schiff

 

[Zoom-boing]

I don't think Obama has a clue.

 

[wimpy77]

neither does schiff

 

[Kevin_Kennedy]

neither does schiff

I would say this article shows that Schiff has quite a good idea of what's going on.

 

[xsited1]

Peter Schiff is right, of course. His predictions always come true regardless of what the masses say. But is anyone going to listen to people like him? Of course not. Obamabots and Neocons want a band-aid solution to every problem and they've got the marketing team to sell it. We are going bankrupt and there is nothing we can do about it.