25IQ

Pooh: I haven’t been able to find a job since I graduated two years ago.
Rabbit: Oh, that’s terrible, but help is on the way since the government is going to cut spending which will revive the economy.
Pooh: Won’t cuts in government spending mean more layoffs?
Rabbit: Oh, that will free up more money for the private sector to create jobs.
Pooh: What would the people you know do with more money do?
Rabbit: Oh, they would pay off their debts.
Pooh: Would they spent it to or start companies or hire new people?
Rabbit: Oh, well no. Businesses already have too much spare capacity.
Pooh: So how is lower government spending right now going to create jobs?
Rabbit: Oh, that will happen when banks are free from government regulation and start lending.
Pooh: Didn’t the government just bail out the banks?
Rabbit: Oh, but that was caused by government regulation?
Pooh: And if the banks they make bad loans again, wouldn’t the government have to step in again. Isn’t that government regulation?
Owl: Look Rabbit does not know what he is talking about. We need more debt and more spending.
Pooh: More debt solves the problems caused by debt?
Owl: Yes.
Pooh: What happens if interest rates go up?
Owl: We will worry about that later.
Pooh: Do you think voters will trust that this lower spending will happen?
Owl: Just because we have never done it before does not mean we won’t do it next time.
Pooh: I am a bear of very little brain, but I think maybe we need to lower our standard of living for a while. You know, save, raise taxes a bit and make sure the less fortunate get through this Great Recession without terrible suffering. I am talking about not just a sustainable environment but a sustainable economy.