"How does declaring bankruptcy help creating more jobs?"
Iceland is the answer. Jobs are recovering superfast after they declared bankruptcy.
You start over again. You face your problems, instead of delaying it. There is a sense of relief when the storm is over and you survived. When all lies are clear by the (horrible)truth, when fraudsters are on everybody's eyes.
Credit is harder to get, and this IS GOOD, when you came from an over indebted economy. Interest rates grow, and savers are fairy compensated from their work.
"From an admittedly fairly uninformed position it appears to me that cutting spending is only going to further erode businesses positions and tax revenue, leading to an even worse position."
Cutting spending is going to erode government position, not business position. On the contrary, when governments prints money the Gov gets free money, and big business get free money, but small business and tax payers are taxed to death.
Inflation over the official levels is the biggest tax on society. If declared inflaction is 2% but real one is 10%, they are taxing 8% of the society's wealth. And you will have to pay taxes to the gobertment in the 8% of "benefit" you have if you manage to not lose your wealth.
Money is better spent by small business and people that by big governments and big corporations. We are lending those entities so they can get money at 0.2% interest rate while I have to pay 17%.
Iceland is the answer. Jobs are recovering superfast after they declared bankruptcy.
You start over again. You face your problems, instead of delaying it. There is a sense of relief when the storm is over and you survived. When all lies are clear by the (horrible)truth, when fraudsters are on everybody's eyes.
Credit is harder to get, and this IS GOOD, when you came from an over indebted economy. Interest rates grow, and savers are fairy compensated from their work.
"From an admittedly fairly uninformed position it appears to me that cutting spending is only going to further erode businesses positions and tax revenue, leading to an even worse position."
Cutting spending is going to erode government position, not business position. On the contrary, when governments prints money the Gov gets free money, and big business get free money, but small business and tax payers are taxed to death.
Inflation over the official levels is the biggest tax on society. If declared inflaction is 2% but real one is 10%, they are taxing 8% of the society's wealth. And you will have to pay taxes to the gobertment in the 8% of "benefit" you have if you manage to not lose your wealth.
Money is better spent by small business and people that by big governments and big corporations. We are lending those entities so they can get money at 0.2% interest rate while I have to pay 17%.