“Between 2007 and 2010, median consumer net worth declined by 39%, with, unfortunately, low income households facing the greatest percentage decline.² This fragment of economic history is a powerful reminder that government intervention can have unintended consequences, often of unforeseen magnitude.”

 

By Jason Hsu at Research Affiliates

As the undead wander the social and economic landscape, investors are loathe to put in fresh capital, not only because lending to perversely motivated zombies is generally a bad idea, but also because their investments can be diluted if government policies designed to protect moribund banks channel new money to past capital claimants whose investments failed. The uncertainty about future government policy further discourages the capital market from injecting fuel and much needed new stewardship to rekindle and shepherd growth.

 

There exist various solutions for eliminating zombie households and banks and restoring economic activity. But all the options are painful.

 

A prolonged slowdown is marked by declining productivity growth despite ongoing government stimulus and uninterrupted QE—this is a path that could be likely …..

 

FULL ARTICLE

Also please consider:

17 Reasons the $17 Trillion Debt Is Still a Big Deal

Has Obama Already Bankrupted America?

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