Reply #39: The problem is NOT lack of capital !!!!

[golfguru]

Corporations are already sitting on 2,000 Billion cash.

There are basically 2 methods to spur business activity.
1. The FED loans money to borrowers or banks.
2. The FED buys US Bonds which makes money available for the government to spend.

Business activity does not increase unless some one is willing to borrow the money
FED is willing to loan out. If FED buys the bonds instead, US Treasury will have
$600 Billion cash to spend.

So where will the $600 Billion cash US Treasury will acquire by selling bonds go?
It will go for federal spending which does not create PERMANENT jobs. They plan to
build a bridge, workers are hired. Bridge is finished, workers are laid off.
And now US Treasury debt is higher by $600 Billion.

If the $600 billion is used instead to start or expand businesses, it creates
permanent jobs. It produces goods & services to absorb the excess cash, thus
not spiking inflation much.

Instead if the money is just spent by the government, the extra $600 cash in circulation
cheapens the dollar and creates inflation.