The way we got out of the Great Depression was, once people started shooting at us, to move to war mobilization where we solved the unemployment problem, IIRC, in 90 days when everyone had at least one job and some two or three.

For a credit economy, deflation is poison, and my view is that with the Great Recession and more, we are in deflation. E.,g., look at what has happened to computer parts — much faster, smaller, cooler, cheaper. That’s great, but, still it is deflation. Look at Google — it’s terrific, for some fantastic productivity, but is putting a lot of reference librarians out of work and beating other means of search — deflation. And the productivity increase from Google apparently don’t show in the GDP figures. Really, better tools, raw materials, etc. that raise productivity tend to be deflationary. Right, smarter robots, deflationary. Serious work on self-driving vehicles to replace professional drivers — deflationary. Good work with sensing, computers, and smarter farm machinery to get more bushels per acre? Deflationary. A Ford truck with aluminum body panels that won’t rust out? Deflationary. Smaller, more fuel efficient cars? Deflationary. The effect of the Internet on movie theaters? Yup,
you guessed it, deflationary. Lots of Internet mail instead of USPS, UPS, or FedEx — the same, deflationary.

So, our Great Recession is deflationary. And after eight years we are still no coming out of it.

How to come out of it? Stop the darned deflation. How to do that? Easiest thing in the world to do —
just print money. How? The US Treasury sells bonds to the Fed which buys the bonds with money that the Fed put on its ‘balance sheet’ — that is, printed money. The Treasury gets the money. Then just write everyone a check. Wait a quarter. If that is not enough caffeine, then write more checks. Keep it up until get the economy going again, out of deflation.

We were willing enough to print lots of money to fight in Viet Nam and inflate the hack out of the
economy until Volker went for 22% interest rates. Bummer.

We should be willing to print some money to get us back to growing again, right, with little or no inflation.

Why have to print it? Because the fractional reserve banking system with its multiplier effect in effect prints money, but since the crash of 2008, with some of the biggest banks losing money and nearly all the banks being severely regulated, the banks are not creating the needed money. So, have the Fed do that. So, we need to print money to replace what was destroyed.

http://themusingsofthebigredcar.com/curious-reality-minimum-wage/

BRC
http://www.themusingsofthebigredcar.com