How to Create Economic Growth in America- 10Aug2010

Michael Pento, senior economist at Euro Pacific Capital, and Dan Greenhaus, chief economic strategist with Miller Tabak, debate the issues in this clip.

I strongly disagree with Michael Pento, who says a depression should be encouraged in America. His view that the govt. should be as impotent as possible, is one of the most funny statements in the recent months. The need is to increase the money supply, not decrease it. The asset prices (home prices) will automatically fall down gradually in the coming years, based on demand-supply, but it will avoid a crash. Today is not the time to trim the role of the Govt.

If anything can prevent America from depression with deflation, it is the US Govt taking the lead with offering new economic stimulus packages – for infrastructure, for education, for vocational training, etc. Fiscal policy levers/incentives must be used to spur private sector growth, where in the govt. either becomes a buyer or actively sources buyers through export opportunities.

The need is for the govt. to take charge and play a major role. US businesses alone can’t do much. In addition, taxes on the rich must be renewed, not removed. Unless job growth happens, no real economic recovery is possible.

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One thought on “How to Create Economic Growth in America- 10Aug2010”

  1. US has started to think a lot inward these days in name of protectionism. One reason it finds its economy in general and banking system in a mess. The attached video is kind of justifying this role. This should be rejected not only for its thought but more importantly through action.
    US has to demonstrate its leadership role now – time was never so ripe. China is a mystery growth story and will never be a liberal thinker and that is precisely the reason, US has to take leadership. Unemployment is bad in US and even those employed have taken much lesser qualified roles they have been doing pre-recession. Retail outlets are not crowded – ball parks of leading divisional team (read Cincinnati REDS) are half empty, restaurant and retailers are cutting cost to encourage customers. Just wonder why encouraging spending needs to stop at federal level. It is needed now – but calculatingly, not to failed blue chips like GM, Chrysler or Citi. It needs to be given to those who otherwise would be eliminated if a second round of recession – let alone deflation and/or depression where to come. Swine Flue reoccur as flue season approaches and with Winter (less economy friendly climate) coming in – Obama should be a donor.

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