Countries trying to recover from a bubble ( real estate or stock exchange ) should concentrate in recovering the purchase capacity of the middle class which is the only way to recover equilibrium between offer and demand .
You do not recover purchase capacity by increasing credit to consumption . By doing so you just increase overall debt and reduce further the future purchase capacity .
Recovering purchase capacity can only be achieved by promoting deflation and stimulating long term investment in areas of strong added value with latest technologies and advanced logistics and processes , because these areas really produce richness through healthily paid employment .
A more modern tax policy must be implemented to stimulate money investment in those areas while investments in real state and stock exchange are kept at levels that will not cause systemic continuous bubbles .
Without a healthy middle class ample and well paid you are simply paving the way for the collapse of many car companies and similar scale production groups , while promoting slave massive work investments that will never be able to pay for a minimum welfare state .
Brahmason
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