It sucked that the country had to bailout the banks, and that we had to spend money to stimulate the economy. But anyone who is not a complete idiot (Tea Partiers!) knows it was necessary to avoid another Great Depression.
Don't believe me. Well, some real economists did the work. Read about it in a THIS NY TIMES STORY.
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Because it's economically sound and sustainable and the right thing to do to give one group of businesses the ability to create assets out of thin air.
Deflation is a bad thing? Maybe I don't know what's good for me, but when prices drop, my purchasing power goes up. Said differently, I get a raise and an increased standard of living when the cost of goods and services go down. I can buy better quality food, take better care of my yard and neighborhood, give more to support charitable organizations of my choosing, and spend more time with my family. If this was a bad thing, why do retailers spend so much money advertising low prices, but when it comes to the economy its somehow different?
So who does deflation really hurt? Well, let's take a look at where money comes from, banks. Deflation means there's a stop or (a very unlikely) reversal of money being printed and pumped into the economy. Banks can't or aren't creating assets/capital out of thin air and pouring it into the economy. If they aren't creating assets out of thin air, that means they aren't loaning money to consumers for unsustainable debt-spending. If they aren't making increasingly poorer and poorer quality loans to people who really can't pay them back, then profits drop. If profits drop for banks, then big bank executives salaries and bonuses get cut. OOOOHHHHH, and if bank executive salaries and bonuses and spliffs go away, then deflation is bad for THEM!!
So since deflation is bad for the bank accounts of big Wall Street Firms, it is therefore bad for the rest of America.
Excuse me citizens, the banks and bank executives have a really lavish lifestyle they need to maintain. Unemployment benefits just won't cut it for them. Since big wall street banks can't profit by lending to you silly citizens who really weren't qualified to be taking out loans anyway, we need to take some more tax money from you and just give it to the people who caused this financial mess we are in so they can keep their profits, bonuses, and spliffs.
We'll also need take a bunch of it out on loan to help them get their profits back in line. Remember, loans are what keep our economy going! This won't cause your kids' grandkids taxes to go up, promise. But don't worry, we'll keep our promises like not taxing your social security benefits.
Sounds sustainable and economically sound...
Teabagged again
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