Austerity is the wrong answer. Assets have to be used to create additional assets.
If you hoard an asset, it will diminish in value. The transnational corporations and the megabanks are all hoarding assets. Only the government with its fiat currency has the power to increase the circulation of money to its appropriate velocity.
Our greatest asset is our educated youth. And how are we treating them? To a trillion-dollars-plus debt burden of student loans, a shyster form of debtor’s prison.
Can anyone remember the policy of a free public education because it is good for business? One correct step would be for the president to declare a jubilee on student debt and forgive it all at one fell swoop.
The money isn’t going anywhere. It is just bits and bytes on paper and in cyberspace. The relieved students will spend and invest this stimulus on other things rather than interest to banks and the government, which clearly don’t need the money.