Great quote explains it all:

[dixiegrrrrl]

"Anyone who believes expoential growth can go on forever in a finite world
is either a madman or an economist"

Kenneth Boulding, economist

For a very easy to understand explanation of what the real money problem is,
I recommend this short video that other DUers have been talking about:

http://video.google.com/videoplay?docid=-9050474362583451279

After this, you should be able to hear the hidden scripts in all the congressinal blather about the economy, and why porposed approaches will not work.

[Delphinus]

1. Professor Albert Bartlett,

from the University of Colorado, Boulder, really knows how to explain Exponential Growth when it comes to energy. I'll look at the vid tonight, but I'm guessing I'll be in complete agreement with Mr. Boulding if he believes the statement he said.

[ixion]

2. yes... they blather on and throw (borrowed) money at the problem -- and from

the top down, no less.

Indeed. It will not work. It does, in fact, make matters worse because it increases our already over-heated debt load.

[dixiegrrrrl]

3. Depressing, ain't it?

[ixion]

7. yep, it is...

especially since it's avoidable. :(

[The Brethren]

5. Very true.

I was always told that "talk is cheap". That is until you listen to a politician because every time you hear them talking, there's taxpayer money going out somewhere.

[lostinacause]

4. The video is wrong.

Perhaps naive would be a better word. The multiplier effect is not the problematic part of the economy right now. The problem is the lack of flow of capital and the feedback effect that it has one economic output.

Economists would not claim that exponential growth would go on forever, only that in the scope of current decision making we should act as if it goes on for ever. In fact the emergence of a global economy and improvements in communications and information processing have made the last 10 years quite productive by historical standards. If America had bothered to properly regulate the financial industry there is no foreseeable reason why this would change.

Among economists that I have heard talk about the issue, the actions taken by the FED and the bailouts represent at least some part of what they believed should be done to rectify the situation.

[Bigmack]

6. Haven't seen "the" video" but

surely to god you're NOT arguing that either linear OR exponential growth is infinitely possible in a finite system?????? Ms Bigmack

[lostinacause]

9. The human race is not going to exist forever, the sun is going to stop burning at some

point and before that growth will not be exponential. I don't see any resource constraints preventing us from achieving at least 2% average growth over the next hundred years. That's long enough from a social science perspective to make it impractical to think about.

[ixion]

8. you should talk to better economists

because what they're doing is highway robbery, and will stimulate only the Swiss accounts of the top 1%, and ultimately leave us in deeper debt, sans stimuli.

[lostinacause]

10. They are academic economists at respectable institutions.

[ixion]

13. where they hail from makes no difference...

but hey, of course you can listen to whomever you choose. That doesn't make them any more correct, because the problem is not simply a lack of flow. It is far more dire than that.

[AdHocSolver]

12. The problem is that all of the capital flow is out of the U.S., mainly to China. n/t

[AdHocSolver]

11. The "real" economy is tanking because of the offshoring of jobs.

Almost nothing we buy is manufactured in the U.S. (except certain Japanese-branded cars).

This means that we owe a huge amount of money to foreigners, mainly China. We produce nothing that we can sell to the rest of the world, except weapons systems, and our corporations are outsourcing a lot of that work as well.

The US is the unemployed guy who is buying everything on his credit card. The corporate thieves are selling all of our manufacturing assets to foreigners to keep the charade of prosperity going.

The governments are going broke because not enough Americans are working and paying income taxes. Many large corporations offshore their operations to avoid paying taxes. The stimulus package will fail if it is used to buy supplies and equipment from foreign countries.

Any economist who does not address the issue of the outflow of capital to foreign countries due to offshoring of jobs is spouting nonsense.

If you really want to learn why the U.S. is in deep trouble read Kevin Phillips' books "Bad Money" and "Wealth and Democracy".

[Mira]

14. K&R on principle, because Dixiegrrrrl wouldn't post it if it were not valuable

Bookmarked for when I have time to pull out my knitting and sit down to pay attention.
This is a long one, and I bet illuminating !

[dixiegrrrrl]

15. ty for the kind words, Mira.

Interesting there are so many points of disagreement on the problem here in DU land, which is a reflection of perspectives out there in real land and the world.
Which means the chances of getting this right are slim.