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Warning: Here's How the "Fiscal Cliff" Could Ruin Your Portfolio

Glenn211 Wrote: Jul 23, 2012 8:16 AM
With all due respect Mr. Sterman, your statement "The government has pumped more money into the economy than it has extracted..." is an impossibility. As any beginning economics student knows, government has no money of its own. It only has that which it extracts from the private sector either though borrowing or taxes or inflating the money supply. Government merely substitutes its judgement on the allocation of that money for the judgement of the free market which leads to a massive mis-allocation of that money.
David4 Wrote: Jul 23, 2012 5:23 PM
David Sterman wrote "The government has pumped more money into the economy than it has extracted, which has supported all kinds of sectors ...", which is true in the narrow here and now. Glenn211 is correct that government did it by borrowing a lot of money (and printing a lot of money), therefore putting a lot of hardship on our plate in the future. Both statements are true. We are in trouble because politicians are only focused on the narrow here and now, -> spend spend spend.
amackent Wrote: Jul 23, 2012 5:18 PM
Seems like pretty basic logic. Why is it that the talking egg heads have such a hard time grasping it? Must be they don't want to?

Imagine a train speeding down a track, just a few miles away from a wall that it will crash into. You can't see the wall yet, but you're told it's there anyway. As the train chugs down the track, the wall gets closer until it comes into view. Before long, that wall appears bigger and bigger until it is right in front of the train. By that time, there's no way to stop the train in time and you can only hope that the damage isn't catastrophic.

That's the game Washington is playing with our economy.


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