Tuesday, June 26, 2012
Quantitative easing is based on a very simple, yet terribly flawed, idea of how to improve a downturn in a capitalistic economy. The idealology of Quantitative easing is that by Government intervention, of spending revenue, and by the Central Bank basically creating cash out of thin air - the thought is that in the selected areas most effected by the downturn - jobs and profits can be created the reverse the trend.
The most evident problem with a Government’s version of Quantitative easing is that the only resources available from them are taken from the same economy that they are trying to ease. Tax dollars taken from the working, revenue generating citizens of that economy. They are the one baring the burden of Quantitative easing, not the Government. The Government officials are strictly the administrators in this scenario, telling the citizens who and how their tax dollars the be used. Government earns and produces nothing, and the resources used in Quantitative easing create more of a drain from the economy than any easing that can be applied.
The lesser effects of Quantitative easing is the manner of how these resources are used. In order for any persons or companies to qualify for participation in Quantitative assistance some very particular criteria must be met. These criteria usually fall under the politically correct list of social diversification and undeveloped, unsupported ideas for technologies that are completely impractical. Jobs and industry ease economic downturns, not crazy ideas that no one could afford to purchase even if they ever could work one day.
Jobs are created by industry and industry cannot maintain growth and create jobs if they are overly burdened by taxes and Government. In a downed economy this situation is even more pronounced. A better approach is to ease the burdens placed on industries and allow them to create more jobs and opportunities because of their own prosperity.
A business or corporation, even an entrepreneur or independent contractor, will not try to expand or grow their business if that will cause a larger burden than the growth will provide. In other words, if it will add more taxes or costs than they see within reason they will not do it. like it or not that is a fundamental fact within capitalism, trying to pretend capitalism is something else will not help a downturn in the economy.