Quote Originally Posted by lom View Post
Quote Originally Posted by socal
Recessions correct the imbalances that where created during the boom. They are necessary.
They are only an evidence of a previous failure.
Error in a system should be corrected immediately and not compensated for afterwards.

A recession is like closing the dam gates fully because they were previously left fully open.
A system in balance keeps the gates at a level where enough water flows out without emptying the dam.
A system in balance does small up and down adjustments to the gate level, responding immediately to a change in the dams water level.
No, not even close. A recession is like partially closing the dam gates because they where fully open.

Printing money and lowering interest rates after a credit contraction is like taking an excavator and bashing the opening wider, and collecting some of the water and dumping back on the other side. "Recovery !" yeah right.

Forget the analogy, if you don't think that recessions are good and necessary then you know nothing about economics. The boom is the problem, the recession is the solution.