Reply to post: Common Sense

Bring back big gov, right? If only the economics, STUPID, could tell us more

John Savard Silver badge

Common Sense

If you haven't got accurate statistics, then you have to make do by applying common sense.

History has shown us that there's a war-boom-bust cycle. After World War I, there were the Roaring Twenties, followed by the Depression. Other wars were followed by similar phenomena. And after World War II, there were the boom years of the fifties and sixties, followed by the slump that started in the seventies.

Governments can print money, but they can't print gold, special drawing rights, or the currencies of other nations. So, if nations don't export enough to pay for cheap goods from China and oil from the Middle East, they either go into debt, or constrict their domestic economies so that people can't afford to buy as much from those places.

Because trade agreements prevent them from keeping their domestic economies stimulated and just raising tariffs.

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