During the 1980s the Ronald Reagan administration embraced the Full Employment Act of 1978. This law mandates central economic planning and gives specific duties to the president, congress and the federal reserve. So, when would stimulus be administered to the U.S. economy? Why wait for a recession? Stimulate the economy every hour of every day.
Ronald Reagan started by tripling the deficit. This was supply side economics. Detractors called it trickle down economics. Lowering taxes was supposed to actually increase tax receipts. Taxes were decreased and receipts did increase. With a lower tax burden, Americans were not concerned that the following increase in spending more than offset any increase in revenue that resulted from the tax increase.
Stimulus of some kind has been applied by every administration every year. Who would opt for stimulus in an economy that was growing by leaps and bounds? Anyone who had the money and power to tap into the feeding frenzy in federal money loved stimulus. Given this new system, the incomes of the working class started shrinking as part of the national pie. The upper one percent began receiving greater and greater portions of the nation’s income.
The rich eventually gained so much political power that all of the countries energy was funneled into elevating the value of their assets. Inflation is the friend of the wealthy. Inflations created for their benefit.Deflation benefits the poor and occurs when the productivity of labor increases. In the system that has developed deflation is against the law. Congress passes laws to prevent it. The Federal Reserve creates money to prevent prices from falling and actively pushes stock prices higher.
A free market system is based on a system of out with the old and in with the new. It is an ongoing process. Stimulus is theft but it is the law of the land. All markets not just the stock markets are rigged by government policy. Running for office to serve is old school. Politicians run for office to position themselves and others who serve them above the law.
There is no integrity in government at all. Resources are completely mis allocated. As soon as the stock market implodes the economy and the political system will be destroyed. Rising asset prices have fueled the entire recovery.
The exact impact of an economic collapse is impossible to calculate. Knowing the collapse is coming is a piece of cake. Where the suffering will be most or least is not that easy. The rich will suffer the most in terms of dollar losses. Just expect chaos. Destroying the United States economy has taken almost forty years. Do not expect a quick rebound.