And a damn fine question for the “Professor’s Classroom”.

We will have a growing economy when it generates increasing amounts of jobs, incomes and good and services.  Is the simple econo 101 answer.

What do we need to make this economy grow?

Consumer spending grows–then the economy grows

Business investment grows–then economy grows

Government spending grows–then the economy grows

So far with the economic downturn we are now experiencing the only growth is in the government spending sector.  What the government needs to do is stimulate the consumer spending, but that would mean that increasing jobs and incomes.  The government is betting on the business investment part of the equation that is why all is being done to get the businesses spending.

But there is a paradox…..unemployment is high and income is low there will be little use for the products that business would create…….if there is no businesses spending why would banks loan to the business?  Government spending is attempting to help business to start spending by control; of interests rates and taxes.

Now you have the paradox–there will be money for loans, but business will not engage because there is little or no consumer spending……now we come to the point of the post……DEMAND is the only answer to the economic situation.  The government spending that has come has NOT create the goods that business would make.  Making banks more loan friendly is NOT helping.

Yes, I am Harping!  Without money there is no demand…without demand there is no production….without production there is no loans……without loans there will be no jobs….without jobs there is no money….without money there is no demand……IT IS THAT DAMN SIMPLE!  DEMAND is the key….create demand and you can create a growing economy.

Peace….Out