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> His insight was that while any single household can dig itself out of a hole by cutting spending when its income falls, the economy as a whole cannot. One household’s spending is another’s income, so if everybody cuts back, no one gets paid. What you get then is a depression—a situation only government can fix because, unlike the private sector, it can afford to spend freely, putting money in people’s pockets and thus getting the economy back on track.

IMO this is a failing assumption that is designed to benefit politicians who make entitlement promises in the future (you can use inflation to undermine the truth of those promises)...

While thrift may initially lead to a stutter/halt in the economy, eventually people will get desperate enough to work for less or products will devalue to lower prices, debtors will accept lower interest rates or even less than principal.

I have long felt that America needs a strong depreciation period so that worker's wages can fall to reasonable values in the world wide scene. (The only reason a living wage is $15 an hour is because so is the price of a burrito w/ tip) ...

In addition, like most half-baked economic insights, it considers the economy of a country a closed system, as if other countries don't exist to buy products when prices fall.

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