Sunday, March 22, 2009

Even Bloomberg Is Going Mad.

On Bloomberg TV last week was a 'pundit' who was offering his expert advice on the alleged benefits of the 'stimulus package'.

He claimed that it took four dollars of debt to produce one dollar of growth (an utter absurdity), and so the trillion dollars would produce about $250 billions of growth, or about 2% of US GDP.

This insanity is a self-referencing non-sequiteur. If it were true, debt would be sufficient to account for all growth. The insanity that this represents is beyond parody; in fact, growth comes from moneys which are generated additional to costs, and debt has nothing to do with this, except that debt allows the redistribution of money from one group of spending to another.


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