per economic perspectives
-- how can government spending, with the fiscal stimulus of the obama administration still largely unspent and backloaded into 2010, be preventing a deeper deflationary collapse? the answer is what keynesians call "automatic stabilizers" -- unemployment benefits and other social programs increase outlays with increased need, while tax revenues collapse, forcing wide government deficits. this of course counteracts the hugely increased savings impulse of the private sector, allowing it to save without sparking a wholesale implosion of GDP while effecting the process of private sector balance sheet repair.
Labels: economics, markets