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View Full Version : Economics Larry Summers: The U.S. Is Like Japan In The 1990s And We Need To Keep Spending


KILLER_CLOWN
04-14-2011, 09:43 AM
Meredith Lepore | Apr. 11, 2011, 4:01 PM

Larry Summers: The U.S. Is Like Japan In The 1990s And We Need To Keep Spending
Meredith Lepore | Apr. 11, 2011, 4:01 PM | 559 | comment 6

Comparing the U.S. to Japan in the midst of its 1990s lost decade, Larry Summers argued at this weekend's INET conference at Bretton Woods that the government needs to maintain domestic demand through further spending.

Don't miss: Richard Koo's presentation on the same subject >

* 58:50 The medicine depends on the disease. It is very different to have the disease which is no one wants to lend you any money anymore and therefore your currency is collapsing, then to have the disease the asset prices in your country are collapsing and people are bringing money back to your country because they think your money is safer there.

* 59:50 The crisis that was much more analogous to the U.S. crisis then the crisis in Thailand, Korea and Indonesia was the crisis that happened in the early 1990s in Japan and, for better or for worse, the American advice, with respect to that crisis, was strongly expansion of fiscal policy and was strongly expansion monetary police. I think that approach is consistent.

* 60:55 The idea that when your currency is in the process of collapsing that somehow printing more of it or selling more financial instruments in it is somehow going to be availing with respect to the currency I thought at the time was somewhat implausible and I think right now is somewhat implausible.

* 60:24 The broad orientation would be that the United States is more like Japan and the broad recommendation is Keynesian expansion.


Read more: http://www.businessinsider.com/larry-summers-says-the-us-is-like-japan-in-the-1990s-and-we-need-to-keep-spending-2011-4#ixzz1JVbTc9sL

:drool:

FD
04-14-2011, 09:50 AM
So far the parallels between the recent US situation and the Japanese situation in the 1990's have been eerie.

KILLER_CLOWN
04-14-2011, 09:51 AM
So far the parallels between the recent US situation and the Japanese situation in the 1990's have been eerie.

*Gulp*

KC Dan
04-14-2011, 10:19 AM
So far the parallels between the recent US situation and the Japanese situation in the 1990's have been eerie.It is and, Japan keeps spending. It hasn't helped bring them out of their lost decade(s), just keep them going. We need to do something different like get spending down and let the private sector turn the economy around.

talastan
04-14-2011, 11:23 AM
It is and, Japan keeps spending. It hasn't helped bring them out of their lost decade(s), just keep them going. We need to do something different like get spending down and let the private sector turn the economy around.

That's racist! ;) JK KC Dan...I completely agree. The similarities with Japan and their lead up to hyper-inflation is staggering and is exactly where we are heading to IMO. Add in the fact of the IMF stating that we (US) need to enact austerity measures, and the world considering dropping the dollar as the World Reserve Currency and we are on a fast track to economic meltdown.

KILLER_CLOWN
04-14-2011, 12:54 PM
I wonder if an individual could get say 20 credit cards and max them out and then tell the judge i way only applying keynesian economic principles because i thought the more you spent the more financially stable you were. Who knew?

FD
04-14-2011, 01:01 PM
That's racist! ;) JK KC Dan...I completely agree. The similarities with Japan and their lead up to hyper-inflation is staggering and is exactly where we are heading to IMO. Add in the fact of the IMF stating that we (US) need to enact austerity measures, and the world considering dropping the dollar as the World Reserve Currency and we are on a fast track to economic meltdown.

When did Japan have hyperinflation?

ClevelandBronco
04-14-2011, 01:08 PM
When did Japan have hyperinflation?

Not since the mid 1970s. In fact, 1999-2005 saw seven years in a row of deflation. The inflation rate barely inched up for the next three years and fell again in the past two years.

http://www.rateinflation.com/inflation-rate/japan-historical-inflation-rate.php?form=jpnir