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Topic Title: How's it going to play out when the next economic contraction occurs?
Topic Summary: Record deficit is showing no signs of closing even though the economy is near full employment
Created On: 05/25/2018 06:01 PM
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 05/25/2018 06:01 PM
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scombrid

Posts: 18043
Joined Forum: 07/24/2003

The economy will contract in a few years. It always does. But instead of paying down the government debt when the economy is decent we are running record deficits. That will leave the government in a position where a stimulus will be impossible to employ. We could end up like Greece or Portugal, especially if we embark on a huge debt funded infrastructure or war spending spree in the next year or two.

So when the contraction comes and revenue to the government falls even more are the mega-corporations that are pocketing the current tax break going to step up and increase their spending to stimulate the economy? Anyone think that is going to happen? 

Or is the government going to be forced to slash spending at the same time that private investment is slashing its spending, thus causing a depresion that is far worse than what preceded WWII.



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