Monday, March 16, 2009

depression suppression

Depressions are not simply evils which we might attempt to suppress, but forms of something which has to be done, namely adjustment to change.... Inflation pushed far enough [would] undoubtedly turn depression into the sham prosperity so familiar from European postwar experience, [and]... would, in the end, lead to a collapse worse than the one it was called in to remedy. Recovery is sound only if it does come of itself. For any revival which is merely due to artificial stimulus leaves part of the work of depressions undone and adds, to an undigested remnant of maladjustment, new maladjustment of its own which has to be liquidated in turn, thus threatening business with another crisis ahead.
-- Joseph A. Schumpeter

No comments: