Wackonomics

[mcsluggo]

Originally Posted by alexamenos

if one were to argue that cigarettes causes people's heads to explode, thereby rendering them unfit for competition, then I think the examples of Jim Thorpe and Babe Ruth would rebut that argument pretty effectively.

by way of analogy....this is pretty much the argument against deflation -- that it feeds a viscious cycle downward....

...but it doesn't, and the 19th century gives us about a hundred years of evidence that the fears stoked about deflation are a bit of reefer madness.

(btw.... I believe "Fiscal Stimulus" = "Re-fellating the Economy")

I don't understand the head exploding analogy, although the fellatio analogy is crystal clear

as far as inflation versus defaltion... it is not all or nothing. No, the world doesn't collapse into a black hole in the face of deflation (nor inflation) but but there are vicious cycles in both cases that are needlessly painful. you could use the exact same analogy to observe that during the 20th century Western economies (and the US in particular) experienced unprecedented levels of growth and prsperity, in spite of the inherently inflationary environment they operated it. BUt that doesn't stop you from breaking out the "fear of inflation Armageddon" crackpipe either...