I’m still struggling with figuring out the economic crisis (for my research) and here is what I have to share.
In order for capitalism to function, it needs money to circulate. And it always needs more and more money to be spent on more and more goods because that’s the basic operating principle of capitalism: it needs more. Stagnation is death. Lack of mobility makes it explode.
Salaries have been stagnant in developed countries for about 30 years. This means consumers didn’t have more money to spend. But this didn’t lead to a collapse because there was a lot of credit. This was fake, imaginary money which didn’t lead to any real growth. And as we just discussed, capitalism can’t tolerate no growth. So the economy collapsed and we have an economic crisis.
Cutting expenditure is the commonly accepted way to battle this crisis but it’s a shitty way because, once again, capitalism hates the very idea of less spending.
The only practical solution is to get a lot of money back into circulation immediately. Another possibility is, of course, to forsake capitalism but since there are zero alternatives, let’s leave that shit to the especially air-headed among the Lefties.
So how do we get big money back into circulation? Governmental spending is out because that’s all borrowed money and we’ve already seen what it costs to pretend that fake money is real.
Pickety suggests extremely heavy taxation of the unused capital that’s lying around. I’m opposed to all taxation that is higher than 20% but it isn’t like anybody is suggesting any other alternative.
This is where I am right now. Let’s see if anybody else has any insights to contribute.