Monday, January 12, 2009
This article contains the interesting question first proposed by the "brilliant" keynesian Richard Khan in 1937, "is it an increase or a decrease of saving which would stave the crisis off?” Apparently there is no answer. My own admittedly simplistic view is that spending creates jobs so anything that increases spending should be able to do the trick, which leads me to conclude increase disposable income. As far as the original question, either an increase -or- a decrease should do the trick. The status quo is the killer. Ideally both an increase and decrease at the same time from different elements of the population. That money has to keep swirling around. Of course that doesn't help the UK if we don't make desirable goods and have a trade deficit.