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Recovery depends on debt load

Counter-cyclical stimulus spending makes sense during business cycle recessions, which is not the kind of recession we're currently in. We're recovering from a single event — the 2008 collapse of America's debt-based economic model after a spending binge that was, admittedly, quite fun while it lasted.

Once consumers get their debt loads down to manageable levels, they'll begin spending again, which is projected to happen in 2015 — unless, of course, 2015 comes and the governments owe so much money that taxes have to be significantly raised to pay back years and years of "stimulus." (And by the way, deficits near 10 percent of the gross domestic product are just another form of stimulus.)

Then we never recover and extra money that should have been used for growth becomes forever dedicated to debt service. America becomes Japan.

Larry Smith, Timonium

Copyright © 2014, The Baltimore Sun
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