Transcript: Thom Hartmann: The coming economic crash... - Dr. Ravi Batra 19 March '13
Thom Hartmann: Welcome back, Thom Hartmann here with you, six minutes past the hour, the second hour of our program. For the next 45 minutes Dr. Ravi Batra is going to be with us. He is a professor of economics at Southern Methodist University, the international bestselling author of numerous books including "The New Golden Age: The Coming Revolution Against Political Corruption and Economic Chaos", and for some reason Ravi, Dr. Batra, I have your book here written down twice. What’s the title of your other book?
Ravi Batra: "Greenspan’s Fraud", remember that?
Thom Hartmann: "Greenspan’s Fraud," thank you so much, yes. Actually one of my very favorite books it’s just been a while since I said it out loud and I don’t know. I guess we are all getting old, here. Anyhow, Greenspan’s Fraud. And, great to have you back with us sir, thank you.
Ravi Batra: Thank you Thom.
Thom Hartmann: So Cyprus, this is the front page story in the New York Times
, I just printed it. I was going to share a piece, well actually I can read it from the screen. "The Cypriot Parliament on Tuesday overwhelmingly repudiated a €10 billion international bailout package that would have set an extraordinary precedent by taxing ordinary depositors to pay part of the bill." Basically, if I have this right, the European Union was saying to Cyprus, you owe us ten billion dollars, we’re going to loan you ten billion dollars to stay liquid, to stay, you know, so that, basically because unemployment is so high, so that you can pay your unemployment costs and healthcare costs and what not for people who are no longer working. And, because the banksters crashed the economy. We’re going to loan you that money but you need to pay it back to us by taking money out of everybody’s checking account, the Cypriots said no, we’re not going to do that. We can get into where that’s going to go but I’m curious your thoughts on what would have happened if they had said yes, and said, okay, everybody is going to have, they’re going to lose 6 or 8 or 9% of the money in their checking account and savings account.
Ravi Batra: If they had said yes then that would set a very bad precedent for banking in Europe, it’s not just Cyprus, then you have Greece, Italy, Portugal, Spain. Banks are in trouble in all these countries and then the depositors won’t be sure about their deposits anymore. So if they had said yes, it would have been very bad for the entire Euro. And I think it's a wise move on their part to reject it but the question now is what’s next and those people who proposed this may, they either have to eat crow or keep pushing for it and that means a crisis will go on for perhaps another week.
Thom Hartmann: Yeah. Had the Cypriots done this would that not have led to a run on the banks in Cyprus?
Ravi Batra: Well, they would have a bank holiday, so they would not allow any withdrawals from the banks for a little while. But it would set a bad precedent for the entire Eurozone, because the banks are stretched out in almost, in UK, in France, not in Germany, but in almost everywhere else, the banks are having a lot of problems.
Thom Hartmann: Right. So you could see other countries doing this and at that point the people of Europe are going to start saying we can’t trust our own banks and then you’re going to see something that’s going to look like 1930, late ’32, early ’33, here in the United States, isn’t it? Wouldn’t you?
Ravi Batra: That’s right. And that’s the thing that this would have been, this would have set a precedent for that and there would have been bank runs, runs on banks, and so who knows where it will have gone. But the crisis is still not over because the problem is that Cyprus is a special situation. It gets a lot, the banks there get a lot of money from Russian depositors and there is a lot of money laundering there. So the Germans, Germans have to pay the money eventually for the bailout. So they will say why should we protect the Russians? So it’s a lot more complicated than just a run on the bank.
Thom Hartmann: Right. Cyprus is for the Russians what the Bahamas or the Cayman Islands are for American. Russian billionaires are using Cyprus as a way to stash their money and avoid paying taxes on it the same way that American billionaires are using the Cayman Islands to stash their money and avoid paying taxes on it. Do I have that right?
Ravi Batra: That’s right. And that’s why the Germans are so reluctant to bail out Cyprus without extracting some kind of cost from that country, because the Russians are involved and then the elections are coming up in Germany I think in September, so there’s a lot of that, a lot of other factors also involved in the whole scenario.
Thom Hartmann: Wow, we’re back to Hitler and Stalin, I mean we’re back to Russia and Germany, you know, at loggerheads. And in fact, I mean, this parallel is a little spooky. But today this is the front page story in the New York Times, you know the headline, "Cyprus Rejects Bank Deposit Tax Scuttling Bailout Deal." And some, let me just read two sentences from this. They’re talking about the crowds out in front of the Cypriot parliament, when they turned this thing down. "Some wielded unflattering," and they’re talking about the protestors. "Some wielded unflattering posters of Chancellor Angela Merkel of Germany, a day after a demonstrator breached security at the German Embassy and climbed to the roof, throwing down the German flag". "A pensioner, Dimitris, 67, who would only give his first name, said, 'Today, Germany is engaging in Nazism again, not with the weapon of force, but with money.".
This is, we had a fellow from Greece on our TV show back, I don’t know, four or five months ago, who was talking about how basically with the Euro what’s happened is that the Euro is the old Deutschmark that the Germans have won World War II. What do you think, what are your thoughts on that?
Ravi Batra: Well that’s the whole problem, that all over the world there are economic troubles, wages are stagnant while productivity keeps rising so you have excess production everywhere. Goods are not selling. So the rich are getting richer because of all this, because of the current economic system, so the various countries like Germany have to bail out those that can’t afford the current system the way it is, and bailing out is not, I mean, the Germans have been bailing out these countries for a long time now. So they have, and their patience is running out, they’re running thin, patience is running thin. So the problem is with the fundamental economic system, and until they reform the system, this will keep on going. And so far they have stabilized the system by using all these gimmicks, so much budget deficits, so much printing of money, not just in Europe but also in the United States and in fact all over the world. But this can’t keep on going forever. And slowly and slowly we are approaching the day when our system is going to collapse and I have put a date on it. I have said that it should be around 2016, or by that time, the system will collapse, because…
Thom Hartmann: Internationally.
Ravi Batra: Internationally, right. There are cracks everywhere in the world and we are patching up these cracks through borrowed money and how long can that go on? It’s not possible to go on forever.
Thom Hartmann: Yeah, yeah. Is the United States relatively immune from this because we control our own currency?
Ravi Batra: Yes, the U.S., being the key currency area, can borrow almost unlimited amounts from China, Japan, and even the Federal Reserve. But even there, there is revolt against huge budget deficits, the budget deficit is coming down. In an economy where wages are stagnant and productivity keeps rising sharply, whenever the budget deficit starts to fall, it takes about 6 to 8 months before trouble strikes. The budget deficits began to fall in Europe about a year ago and now, you know, they are back to deception
and things are getting worse.
Thom Hartmann: So when our budget deficits fall we’re going to have a problem? Let’s continue this after the break. We’re talking with Dr. Ravi Batra, his website, RaviBatra.com. A professor of economics at Southern Methodist University, author of the international bestselling books, "The New Golden Age", and "Greenspan’s Fraud". RaviBatra.com. we’ll be right back.
Thom Hartmann: So Doctor Batra, you still with us?
Ravi Batra: Yeah, I'm here.
Thom Hartmann: OK, great. We've got another break in 4 minutes and after that I'd like to get into this notion of deficits going down and being followed by a recession, but what's the relationship between what's happening in Europe and what's happening in the United States?
Ravi Batra: Well, we are living in a global economy and a lot of people have, and funds are tied up, Americans don't have funds in Cyprus, but a lot of Europeans do. Russians do. And Euro's used as a key currency. So the Euro's falling now. As the Euro falls, oil comes down, gold comes down, stock market comes down also with that. So we are connected to them through the Euro.
Thom Hartmann: Right. And what effect will this have on Asia?
Ravi Batra: The same thing. When the Euro falls, the whole world gets worried, because it's a major area with huge GDP. Euro zone's GDP now exceeds US GDP.
Thom Hartmann: And what is it - 17 trillion, in that neighborhood?
Ravi Batra: Yeah, along that, yea, 16, 17 trillion.
Thom Hartmann: Yeah, and then the US is around 15 and change.
Ravi Batra: Yeah.
Thom Hartmann: So, and what is the Asian; the Chinese, Japanese, Chinese, South Korean GDP, do you know?
Ravi Batra: Well, the Chinese is about 40% of the US, and Japan is on half, Germany is one third.
Thom Hartmann: Yeah, so the Asian, if you were to posit the Asian countries as a block - certainly they're not - but that would be another major third.
Ravi Batra: Another major...
Thom Hartmann: Another major node of this kind of thing. Do you think that China is in the midst of a housing boom right now? That they're in the same kind of boom bubble that we were in back in 2005/2006?
Ravi Batra: Yeah, I think that's right. The Chinese property prices are rising very fast and their banks are also over-leveraged so they could have big problems, but they have so much money, they have I think $2 trillion in dollars from the United States trade surplus over the years, so when they fall sharply the growth will still be positive, but 5% growth rate in China is supposed to be a recession.
Thom Hartmann: Right, and they're down from, what 8 to 5%?
Ravi Batra: They're down, yes, they used to be 9% routinely, now they're down to about 7 and a half.
Thom Hartmann: And do you expect that, what do you think is going to be the pin that pops the bubble world wide?
Ravi Batra: I think the falling budget deficits. Now the US deficit is going to fall, Europe's is falling already and you can see what's happening in Europe, they have the highest unemployment rate ever sine 1995, that is the year they started records for the entire Eurozone area. So now they have the highest unemployment rate since then, and so here now the budget deficit is beginning to fall ...
Thom Hartmann: OK< let's pick that thought up on the other side of this break. We'll be right back. It is 20 minutes past the hour. We'll be back in about 20 seconds here with Dr. Ravi Batra.
Thom Hartmann: 20 minutes past the hour, welcome back. Thom Hartmann here with you. Dr Ravi Batra, professor of economics at Southern Methodist University, the international bestselling author of "The New Golden Age: The Coming Revolution Against Political Corruption and Economic Chaos", the guy who saw all this coming, the guy who saw the last crash coming, and who laid out, you know, "Greenspan’s Fraud", his other book, another one of his many books. You can read them all at RaviBatra.com.
Dr. Batra, you said that Europe’s budget deficit went down and what followed was unemployment and recession. Everybody, all the politicians in the United States are talking about decreasing our budget deficit. Why would decreasing a budget deficit cause there to be unemployment and recession?
Ravi Batra: Well there’s not enough consumer demand in the economy because wages are stagnant. People’s salaries have been falling for a very long time so there’s not enough consumer demand. And if, when supply exceeds demand, when there is too much supply of goods and not enough consumer demand, that’s when people are laid off. So to make up for that demand shortfall, the government has been spending a lot of money through its extra budget deficits. The budget deficit has been over a trillion dollars for the past three or four years and that has stabilized our economy. But once the budget deficit starts to fall, with wages stagnant, then consumer demand, then total demand goes down, and so supply is greater than demand even more and therefore there are layoffs. And we have seen that becoming…
Thom Hartmann: And this becomes a vicious cycle.
Ravi Batra: Yeah, it’s the vicious cycle. We have seen that coming in Europe, well we should not have an economy that depends so much on the government spending, on government deficit. We should have a good economy which we used to have until about 1980. We did not need much in the form of budget deficit until ’80, 1980, and we had unemployment rates around 3, 4, 5%, with the exception of the 1970s because of the huge jump in the price of oil. We had high unemployment rates. But otherwise, our unemployment was around 4 and 5 %. And we did not need huge budget deficits to keep employment high. But ever since they introduced this supply side economics, or economics that was in 1981, and then again through what George Bush did in 2001. So ever since they introduced the new economic ideas we have needed huge budget deficits to keep the economy growing and keep people employed.
Thom Hartmann: Now Elizabeth Warren pointed out yesterday that had, that traditionally, I guess from the George Washington administration until Reagan, that as productivity went up, wages pretty much followed that line. And in other words wages went up along with productivity. But starting with the Reagan administration, productivity continued to rise, wages flattened out, she believed that if wages had kept up with productivity, right now the minimum wage would be around $22 an hour, the fellow that she was interviewing, an economist who was speaking before congress, said no it would actually be around $30 or $33 an hour. And so is it that, is it that simple really? That wages haven’t kept up with productivity? The top 1% has taken that gap, they’ve taken all that money in the middle and left working class people with so little money that they can’t produce demand adequate to drive the economy?
Ravi Batra: That’s right. This is the theory of the wage productivity gap. I guess they finally read my books about. I’ve been talking about this theory ever since 1999.
Thom Hartmann: Yes.
Ravi Batra: Remember that year, that was the year we had the budget surplus. And see the impact of this government deficit? In 1999 we had the rare budget surplus and the stock market crashed in the year 2000.
Thom Hartmann: Right.
Ravi Batra: So the moment in an economy where productivity rises fast but wages don’t, unless the government deficit keeps rising, you have a crash.
Thom Hartmann: So you basically, so basically what you’re saying as an economist, as a professor of economics, is that politically we have a choice. We can either finance demand, because you’ve got to have demand to drive an economy. We can either finance demand by having the government borrow money and spend it, and you know, whatever, however it spends it eventually ends up in people’s pockets, and they use that to buy things, creating demand. Or you can make sure that wages keep up with productivity, you can raise wages, but you know you have to do one or the other.
Ravi Batra: That’s right. So there are two types of policies. Some policies allow wages to keep up with productivity. Other policies don’t. And when wages don’t keep up with productivity then we have to keep raising the budget deficit to stabilize employment.
Thom Hartmann: So when we look in the 1980s there are a couple of things that I see that I see, that seems like maybe that was the point at which wages flattened out. We see the destruction of labor unions, we see the elimination of high marginal tax rates on millionaires and billionaires, and we see a change in the rules for compensation so that people can be compensated with stock and pay a maximum 15% capital gains tax rather than regular compensation and pay these high tax rates. Are those the things that cause this separation? That caused the billionaires to make off with everything? Or am I missing something?
Ravi Batra: Those are some of the things but the most important things are that the minimum rage did not rise at all under Reagan, and the people’s wages are linked to the minimum wage. The minimum wage serves as the base and then you add skill premium to the minimum wage to get a skill based wage. So the minimum wage did not rise under Reagan at all and then you had additionally free trade, outsourcing, huge trade deficit, all of these things allowed companies to move factories abroad, manufacturing went down, labor demand did not rise as a result, so wages could not rise, would not rise, even though productivity kept rising. And the irony is that free trade and outsourcing, they raise productivity. They raise productivity, but at the same time, they make wages go down. So it’s a double whammy, double jeopardy.
Thom Hartmann: Right. So the billionaires make out even more, the economy grows so they get even more money, the average working person gets even less. And demand falls in the economy and government has to step in and if it doesn’t we’re all screwed. We’ll be back. Dr. Batra, are you going to stick around for our next segment?
Ravi Batra: Yeah sure.
Thom Hartmann: Welcome back, Thom Hartmann here with you. Dr. Ravi Batra on the line with us. Professor of economics at Southern Methodist University, international bestselling author of numerous books, including two of my favorites, "Greenspan’s Fraud" and "The New Golden Age: The Coming Revolution Against Political Corruption and Economic Chaos". You can find out all about all of it at his website RaviBatra.com.
Dr. Batra, we’re talking about how this, you know, starting with this, maybe the lit fuse of Cyprus, how this may play out. Spain now has 25, 30% unemployment. Greece has very, very high unemployment. The Germans, and the wealthier European states are perceived increasingly as plunderers across Europe. What, and here in the United States because of Reaganomics and these insane free trade policies, we’ve, you know, our own middle class has been wiped out. Is this the disaster capitalism that Naomi Klein talked about? Is this creating a disaster and then profiting off of it, or is this just the consequence of misguided ideology, almost a theology, the Milton Friedman theology.
Ravi Batra: Well, see I have another theory called the law of social cycle, and I wrote that about that law in 1978 predicting the downfall of both Soviet Communism and monopoly capitalism. And I wrote in that book that Soviet Communism would collapse by the year 2000, and that monopoly capitalism would get into big trouble around 2010. And then I updated all that stuff in the books that you talked about. And in the update I wrote that by 2016 we should see a collapse of monopoly capitalism all over the world. So that’s what we are seeing now. The trouble is there in Europe, but the United States, being the kind of mother country of this monopoly capitalistic system, is still a bit immune from those headwinds. But things are going to be pretty bad soon here also because the budget deficit is beginning to fall. And the falling budget deficit is what causes these systems to fall because wages are stagnant.
Thom Hartmann: So what would you, is this just going to be a situation of the crash is going to happen, people are going to realize the error of their ways, and we’ll go on? Is that how you see this, and we’ll figure out something, an alternative to this? Is that what you see playing out?
Ravi Batra: That’s right. I see an alternative to the system and that the new system will be one of economic democracy. See we need a system where wages automatically rise when productivity does. Because unless that happens we have to keep increasing our budget deficits and postpone the problem all to the future generations, our children. So it’s the hard world
system. And plus, just look at this. In the past three years, from 2009 to 2012, the budget deficit was one and a half trillion dollars. And the justification was that we need this to create jobs. Now we created one million jobs in every year over the past three years and spent one and a half trillion dollars to create one million jobs. If you divide one and a half trillion by one million, you get one and a half million. So we spent one and a half million dollars to create one job which pays only $50,000 on average. So where is the rest going? It’s going all to the rich, rich people and our budget deficits are enriching the rich at the fastest possible pace and our government keeps wondering why are the rich getting richer?
Thom Hartmann: You know, Arnold Toynbe I believe it was, said that when the last man who remembers the horrors of the last great war dies, the next great war becomes inevitable. And Steve Keen, an Australian economist on our program earlier, or last week, suggested that the main thing that constrained the banksters up until the 1970s was that most of the people in a position of power in the banking industry remembered the last great depression and that when they started dying off and the boomers who were born after the great depression started taking those positions of power and they had no recollection of bankers run amok, then the next crash became inevitable, or the next banking scandal. Is this, how does that fit in with your theory of social cycles, and does this all make sense to you?
Ravi Batra: Oh yes it certainly does. In fact I have been writing about this kind of scenario for the past 30 years. And this is all part of the law of social cycle. The law of social cycle is an inevitable law of nature. I have studied history over the past 5,000 years, and I found that in every civilization there were revolutions, age of acquisitors ended up in the throes of revolution. And towards the end of that age of acquisitors there was so much wealth concentration and people had to constantly borrow money to survive, and in the end they simply owed
to the rule of money in society and then a new age was born. So now our monopoly capitalism is that age of acquisitors towards its end. In the new system we will have economic democracy in which the majority shares of large corporations will be in the hands of employees themselves. So the CEOs will be answerable to their employees and then while productivity goes up, automatically wages would rise, and when that happens we don’t need any kind of government intervention, we don’t need budget deficits at all to keep employment high.
Thom Hartmann: Now the German constitution at the suggestion of Harry Truman, has built into it - and this was, Truman was fighting the republicans on labor unions really, really hard, I mean to the point that they overrode his veto on Taft-Hartley - has built into it a statement that any corporation that employs more than 1,000 people has to have half of the seats on its board of directors occupied by representatives of organized labor, of the labor unions that work in that corporation. Is that representation of labor in the German industrial society, is that one of the reasons, in your opinion, why Germany hasn’t collapsed the way so many of the other countries around it have, because their wages have kept up?
Ravi Batra: It definitely is. It definitely is. And their system comes close to economic democracy, although in a democratic economy you don’t have the need for unions because unions are the majority owners. So you won’t even need unions in a democratic economic system.
Thom Hartmann: Right. Do you see what’s happened in Argentina since 2001, 2002, where so many, so many of the factory owners fled the country and people just went in, reopened the factories, took them over, and now you’ve got a lot of worker-owned cooperatives in Argentina. Is that the sort of thing you’re talking about?
Ravi Batra: That’s right, that’s exactly what we are talking about. In large corporations, the majority of shares will be in the hands of the employees, whereas in smaller companies they will be co-ops. In such a system whenever somebody becomes more productive, automatically their wages will rise. And when that happens you don’t need any government interference, you don’t need any budget deficits, you don’t need to print a lot of money and risk inflation, you don’t have stock market bubbles and crashes or housing bubbles and crashes, you have a great economic system when you have a democratic economy. And by the way, there is evolution of society over time, so through that evolution we have reached a stage of political democracy, the next stage is one of economic democracy.
Thom Hartmann: How do we, in the process of getting there, how do we move, how do we make that transition?
Ravi Batra: Well I think there is going to be another bit with the stock market crash and then the stock prices will fall sharply. The government will be able to buy the shares at dirt cheap and then sell these shares on installment basis to employees. And that takes care of it.
Thom Hartmann: So the government would have to intervene to do this. How do you restrain a new billionaire class from forming out of this? How do you keep what happened, you know like the oligarchs who rose up in many of the former Soviet states? How do you prevent that? Because you know, everybody got to own their apartment, everybody had a share in the company, sort of like what you’re describing. And then people went around and bought up those shares from people who didn’t realize their value, and aggregated them, and now boom you’re back to you know hyper-millionaires. How do you prevent that from happening?
Ravi Batra: Well through a responsive government. After all, our American oligarchs tried to prevent a valid election in 2008 didn’t they? And then again they tried their best in 2012 and remember I was on your show again and again and I said Obama is going to be reelected no matter what. And see 2009 was, the beginning of this revolution. The election of the black candidate as president was unprecedented and that was the start of this revolution. And it takes about 7, 7 and ½ years before the revolution succeeds, so that’s why I have chosen the year 2016, 2009 plus 7 is 2016, and I think that’s the year when monopoly capitalism collapses in the United States.
Thom Hartmann: Yeah. It makes perfect sense. Dr. Batra, another four minutes of your time if we may?
Ravi Batra: Sure.
Thom Hartmann: Okay thank you. We’ll be right back. 45 minutes past the hour, Thom Hartmann here with you. Dr. Ravi Batra on the line with us. RaviBatra.com is his website. His most recent books: "Greenspan’s Fraud" and of course "The New Golden Age: The Coming Revolution Against Political Corruption and Economic Chaos", in which he foresaw all this stuff that’s happening right now. He explained how it would happen, how it is happening, and what we can do about it. A great book, check it out, "The New Golden Age."
Thom Hartmann: Thom Hartmann here with you and Dr. Ravi Batra on the line with us for the last few minutes here before Talk Radio News comes in with our news check-in for the day. Dr. Batra, earlier I shared with you a quote from a Greek, a Cypriot. somebody from Cyprus who was saying that, in fact, the actual quote was, 'Today, Germany is engaging in Nazism again, not with the weapon of force, but with money" and Mike, excuse me, Randy, I guess, no, Mike has apparently dropped off the line, but we had a caller a few minutes ago who was saying, 'Germany's a democracy, this is not Nazism. If it's not Nazism, and I think I would agree with that statement, I think you probably would too, what is it that Germany is doing in driving the EU so hard and making such draconian demands that money is being sucked out of peoples' saving accounts?
Ravi Batra: Germany is doing the right thing because running high budget deficits is no way to fix an economy. Plus the so-called Russian mafia has a lot of money invested with banks in Cyprus. So, and Germany has been bailing out so many other countries and people there are tired of it now. The question is, why should they be footing the bill? They are not raising
any monopolies, they don't have monopoly capitalism. They have, as you said yourself, have labor representatives sitting on corporate boards. So I don't think Germany is doing anything unfair. What is unfair is the demands on the part of the countries to keep having budget deficits and fix the economies through those budget deficits rather than through a democratic economic system.
Thom Hartmann: Right. So, over the short term, I mean, president Obama has proposed that we raise the minimum wage to $9, the progressives in Congress are suggesting $10. You have some senators even suggesting $10. Is that enough to generate enough demand to keep our bubble from bursting or is that just too small a step?
Ravi Batra: That's a good starting point. We should raise it to $10 and then link it to inflation and national productivity so that as productivity goes up the minimum wage automatically rises with it.
Thom Hartmann: And to what extent, another argument I've heard made is that wages, I actually had a conservative economist on the program who said, "oh no, wages have not decoupled from productivity, our way of measuring productivity has gone crazy because a company now has their product made in China and so there's no American labor in it or very little American labor in it and yet the company still is selling this product and making a big profit so it looks like productivity has gone up from average American workers when in fact there's just fewer American workers. Does that make any sense to you?
Ravi Batra: Well, part of this is true. Remember, it's also seeing free trade, trade deficits, all of those things raise the productivity the newest economy. But wages have to rise at the same time. But most of the increase in productivity has come from new technology ...
then you have computers, robotics, all those have created a huge jump in productivity. And so it's not just outsourcing but there are other things as well...
Thom Hartmann: Dr. Ravi Batra thank you so much for being with us today, Dr. Batra.
Ravi Batra: Thanks a lot.
Thom Hartmann: It is always a pleasure and an honor to have you on. Dr. Ravi Batra, check out his web site RaviBatra.com
Thom Hartmann: Welcome back, Thom Hartmann here with you. Ten minutes before the hour, and a thought provoking conversation with Dr. Ravi Batra, in which he is suggesting that if we raised our minimum wage then maybe we could avoid economic disaster but basically you’ve got to have one of two things. You’ve either got to have more money in peoples pockets to create demand and that demand of course is what drives the economy. Economies live on demand. Or, you’ve got to have government spending to create demand. Government spending going into the pockets of people.
Transcribed by Suzanne Roberts, Portland Psychology Clinic, and Sue Nethercott.