Deflation is a leakage from this circular flow, to pay banks and the real estate, called the FIRE sector - finance, insurance and real estate. These transfer payments leave less and less of the paycheck to be spent on goods and services, so markets shrink.
Michael HudsonTrump's claims that he's making taxes more democratic for the people, but it actually is a vast sucking of income and wealth upward.
Michael HudsonIf you increase living standards, you make labor more productive. This is why Asia today is becoming more productive than the United States.
Michael HudsonEither you can save the economy, or you can save the One Percent from losing a single penny.
Michael HudsonThis is not really currency that circulates. It's like the old joke about expensive vintage wine. Wine prices will go up and once in a while somebody will buy a 50-year-old bottle of wine and say, "Wait a minute. This has gone bad." The answer is, "Well, that wine isn't for drinking; that's for trading." These $100 bills aren't meant to circulate. They're not to spend on goods and services. They're a store of value. They're a form of saving.
Michael Hudson