Trickle-Down Theory vs Trickle-Down Reality

Adask's law

[courtesy Google Images] [courtesy Google Images] Trickle-Down Theory

In the aftermath of the onset of the Great Recession of A.D. 2008, the Federal Reserve gave trillions of dollars to major (“too big to fail”) banks and set interest rates at nearly zero.  It was presumed that the banks would lend those trillions of “free” fiat dollars to the public at low, low interest rates.  It was presumed that all of the free currency given the banks would thereby “trickle down” to the great unwashed.

It was also presumed that the public would borrow the enormous sums of “free” dollars at fantastically low interest rates to invest in businesses or just buy stuff.  All the resulting public investment and purchasing was expected to stimulate the economy, and—ta-da!—America would almost see an almost instant “Recovery” from the Great Recession.

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