Quote:
Originally posted by FlyingIguana
i'm just spitting out two different opinions on the subject. deficits cause upward pressure on interest rates that can cause the crowding out effect to occur. if there's an excess of loanable funds then the crowding out effect is less likely. since we're not in a recession its not likely that there is an excess.
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Correct in theory, however, we've been experiencing different than what common economic theory suggests. For example, we aren't experiencing inflation which is uncommon in a resession/slump. Actually we've seen the reverse, prices on most consumer goods have gone down. At least, in what I've seen, prices are either frozen or going down, mostly the latter.