Recently there are a lot of debates between the Keynesian and Austrian economists on the skyrocketing government deficit. My opinion is this: In general, government spending is wasteful. To expect governments to efficiently allocate capital is a larger mistake than to believe in Bernie Madoff. Keynesian policies only makes sense if consistently followed. The true Keynesian policy maker would save money during good times and spend money during bad times. The intention of such policy is to smooth out the […]
Read More Here! 0The recent stock market rally signals a decoupling between the stock market and the economy. The economy, given its current state, would have a L-shaped recovery at best. As the consumers facing terrible job market, and high debt levels for households and government remains if not worsen, the economy powered by consumption is not likely to have a robust recovery. On the other hand, aggressive cost cutting has fueled a recovery in corporate profit. However, sales trend still remains weak. […]
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