The Velocity of $ = D$ / T

[Telarus]

The Velocity of $ = D_$ / T

OR, stated in plain English, the velocity of money can be thought of as the distance it travels (relative to the spender) within a time period.

Money that is spent often (i.e, it is received, then spent quickly, and the new recipient also spends it quickly) has a very high velocity.

Money that is stuffed into a mattress has a very low velocity (near zero, it would seem).

I got the concept from this blog post: http://viableopposition.blogspot.com/2013/10/the-ever-slowing-velocity-of-money.html

There are a few graph calculating our economy's velocity, but this one really stood out. Note how the current economic velocity is LOWER than it was during the Great Depression:

(This image was sourced from: http://research.stlouisfed.org/fred2/graph/?g=9wK )

I'm still chewing on this myself, but thought I'd throw it up here.

[LMNO]

Something not pointed out is the remarkably stupid austerity measures that have been in place during this recession/recovery. The easiest way to speed up money, to the point of hitting the hyperdrive button, is government spending. During hard times, they're the ONLY ones capable of it. But if you put austerity measures in place, then NO ONE is spending ANYTHING.

[Junkenstein]

The above becomes even worse when you consider that Austerity is now a normal part of the political landscape. It's not going away any time soon so we could conceivably be on the way to the greatest recession.

Nice find Telarus, will dig into it more and see if I can come up with anything.

[Telarus]

The easiest way to speed up money, to the point of hitting the hyperdrive button, is government spending.

Great point LMNO. Note the steep drop on the graph in the shaded portion of 2008. Near the end, notice how the graph wasn't dropping quite as sharply? Yah, that was the "Stimulus". It didn't reverse the trend, and when it ended the velocity dropped faster (again).

[Reginald Ret]

Spending your way out of a recession is great if you would just default at the end. Can't the USA have a state seccede on the one condition that they take up all the national debt? Then that state goes bankrupt and the USA conquers the state. Presto! debt gone.

[Mesozoic Mister Nigel]

Spending your way out of a recession is great if you would just default at the end. Can't the USA have a state seccede on the one condition that they take up all the national debt? Then that state goes bankrupt and the USA conquers the state. Presto! debt gone.

Uhhh how does that work? If the US conquered that state, they would then be responsible for its debts.

[Reginald Ret]

Spending your way out of a recession is great if you would just default at the end. Can't the USA have a state seccede on the one condition that they take up all the national debt? Then that state goes bankrupt and the USA conquers the state. Presto! debt gone.

Uhhh how does that work? If the US conquered that state, they would then be responsible for its debts.

The state defaults before being conquered. Debt gone, credit rating shit. But their credit rating is not the USA's credit rating. Look, it is a great idea in theory. All it requires is that the banks don't use logic or pay attention.

[whenhellfreezes]

Spending your way out of a recession is great if you would just default at the end. Can't the USA have a state seccede on the one condition that they take up all the national debt? Then that state goes bankrupt and the USA conquers the state. Presto! debt gone.

Uhhh how does that work? If the US conquered that state, they would then be responsible for its debts.

The state defaults before being conquered. Debt gone, credit rating shit. But their credit rating is not the USA's credit rating. Look, it is a great idea in theory. All it requires is that the banks don't use logic or pay attention.

As per normal the onion has done it first. http://www.theonion.com/video/us-government-stages-fake-coup-to-wipe-out-nationa,14356/

[Reginald Ret]

Spending your way out of a recession is great if you would just default at the end. Can't the USA have a state seccede on the one condition that they take up all the national debt? Then that state goes bankrupt and the USA conquers the state. Presto! debt gone.

Uhhh how does that work? If the US conquered that state, they would then be responsible for its debts.

The state defaults before being conquered. Debt gone, credit rating shit. But their credit rating is not the USA's credit rating. Look, it is a great idea in theory. All it requires is that the banks don't use logic or pay attention.

As per normal the onion has done it first. http://www.theonion.com/video/us-government-stages-fake-coup-to-wipe-out-nationa,14356/

Dammit, i know there is a novel that did this years ago, but i can't remember what it is. Maybe Charles Stross' Rule 34?