This statement is inconsistent: in the first sentence of the purchase of the debt reduced velocity

"All slumps are the Inexorable Consequences of the destructive forces of booms ... Obviously the first Necessity of a nation of income is decreasing reduction in expenditures ... It was pointed out That due to decreasing fighter mediafire revenues and despite the Efforts of the Congress and the Administration, we were again faced with a deficit during the next fiscal year. I Ürgédi upon the Congress the Necessity for further drastic reduction in expenditures and increase in revenues. "
Mistakes of the past are repeated. Hoover's words for the past 80 years ever nezostarli. Everything is in the past, wrote in a scientific article on the causes of the Great Depression, is still ignored. The crisis is said to be the result of abundance fighter mediafire and debt is evil.
The mechanism of the crisis, fighter mediafire however, was the same then as it is today and, unfortunately, Friedman fighter mediafire us today is not able to blow the eyes, as it did during the Great Depression. fighter mediafire Monetary policy is tightened, falling aggregate fighter mediafire demand and thus nominal income and expenditure of the whole economy (NHDP). The price level is not matched (not decreasing) immediately, and so the market is purified in higher unemployment and lower real output. The decrease of the nominal output of the economy naturally causes pressure to lower tax revenues, higher deficits and debts. Treatment in this situation is apparently clear: rising deficits and debts are evil, so it should be reduced "drastically" state spending and increase revenue. What will happen? fighter mediafire
Since monetary fighter mediafire policy across the situation only watch idly (although i could when fiscal tightening summarily almost free hand NHDP increase) and decrease government spending and increase taxes will cause a further decline in aggregate demand of the economy (NHDP). fighter mediafire Politicians then come "šokojúco" again with the bad news: since the economy fell back again, and failed to select as many taxes as you intended fighter mediafire to choose and also have discussed reduce spending on much as it was intended (since it was necessary to pay unemployment benefits, or early pensions etc.). Fortunately, lessons learned from the previous failure, politicians come up with innovative solution: the root of all evil debts are, so just drastically reduce government spending ....
This brilliant circular recipe restrictive monetary and Fiscal fighter mediafire policy is a guarantee nekonenčiacej the recession, but there is always a chef who pulls him. Nedávano so did John Dinga from iness, but Kamil Boros, which the Spectator published an account of that money is debt and the nominal income of the population as a function of debt. From this simple but erroneous, conditions and draws the wrong diagnosis of the European crisis.
Everything starts with an incorrect premise that money to get into the system only if the State or household into debt. This probably stems from the observation that the central bank lowers interest rates, and so people are more willing to go into debt and borrow from it. This view, however, ignores other transmission channels, which expansionary monetary policy increases aggregate demand. Central Bank as their actions. increasing asset prices and hence nominal assets inhabitants. Households start (partly) new assets to spend, and since not all of the prices of goods and services respond flexibly, so the increased nominal spending translate into increased fighter mediafire real income. Debt in this case is of no importance.
Apropos fighter mediafire property. This is a quantity which analysts base their considerations often forget - let us also comment Ronald Ižip. Analyses are full of curves rising debts, fighter mediafire but rising curve of property are ignored, although they are essential. Most heavily indebted households in the EU relative to disposable income are the Nordic (Denmark fighter mediafire 270% Netherlands 250%, 180% Norway, fighter mediafire Sweden 150%, the area average 99%). Debt does not make those households serious problem, because not only have a lot of debt, but also a lot of property. As someone a few years ago leveraged and invested in shares fighter mediafire of Apple, and even today has very little income, so it definitely is not no poor, quite the opposite. Correctly should therefore be placed net household wealth, ie assets, net of debt.
Globally, however, all debts someone savings (deferred fighter mediafire money not on the shelf), so the claim that the world is in trouble, because a lot of people disagree, says the worthy but so very very old Keynesian. fighter mediafire
Kamil Boros denies its own argument: "In the latter case, the household finances the purchase of the debt, we contrast velocity of money drops to 1,996 (1002000/502000). While GDP is the same in both cases. Thus, the current slowdown in the velocity of circulation of money is more an indicator that households save more and less leveraged than that because of low inflation, respectively. deflationary expectations are sitting on money. "
This statement is inconsistent: in the first sentence of the purchase of the debt reduced velocity of money in circulation, but subsequently the decline rate of contrast presented as an indicator of rising savings and no debt. In doing so, the fact that households are sitting on money just means that households are spending less (ie for the time they spend less income