--- title: "Meaning & Key Takeaway of: Negative effects on the economy were…" description: "\"Negative effects on the economy were covered up with a flood of liquidity from the Fed. That,plus lax regulation, led to a housing bubble, a consumptio..." image: "https://sms4smile.com/quotes/i/924/joseph-stiglitz-1351_borrowed-money_negative-effects-on-the-economy-were-cov_2625966.jpg" --- # Negative effects on the economy were covered up with a… ![“Negative effects on the economy were covered up with a flood of liquidity from the Fed. That,plus lax regulation, led to a housing bubble, a consumption boom - but we were living on borrowed money. It was inevitable that there would be a day of reckoning, and it has now come. We will be paying the…” quote by Joseph Stiglitz](https://sms4smile.com/quotes/i/924/joseph-stiglitz-1351_borrowed-money_negative-effects-on-the-economy-were-cov_2625966.jpg) [Download](https://sms4smile.com/quotes/i/924/joseph-stiglitz-1351_borrowed-money_negative-effects-on-the-economy-were-cov_2625966.jpg) [Open image](https://sms4smile.com/quotes/i/924/joseph-stiglitz-1351_borrowed-money_negative-effects-on-the-economy-were-cov_2625966.jpg) > “Negative effects on the economy were covered up with a flood of liquidity from the Fed. That,plus lax regulation, led to a housing bubble, a consumption boom - but we were living on borrowed money. It was inevitable that there would be a day of reckoning, and it has now come. We will be paying the costs "with interest".” [Joseph Stiglitz](https://sms4smile.com/quotes/author/joseph-stiglitz/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Loose monetary policy and lax regulation created a bubble that led to inevitable reckoning. **In simple terms:** Bad policy caused a bubble. Key Takeaway Advocate for responsible regulation. Themes economics policy risk Mood cautious serious Type analytical inspirational When to use this quote - banking - housing market - government budgeting Key Concepts monetary stimulus financial regulation Questions to Reflect On - What safeguards can prevent future bubbles? - How to balance growth and stability? A Different Perspective Political resistance can stall reforms. ★ ★ ★ ★ ★ No ratings yet [Borrowed money](https://sms4smile.com/quotes/about/borrowed-money/) [Customer](https://sms4smile.com/quotes/about/customer/) [Economics](https://sms4smile.com/quotes/about/economics/) [Economy](https://sms4smile.com/quotes/about/economy/) [Flood](https://sms4smile.com/quotes/about/flood/) [Housing bubble](https://sms4smile.com/quotes/about/housing-bubble/) [Interest](https://sms4smile.com/quotes/about/interest/) [Money](https://sms4smile.com/quotes/about/money/) ## Related quotes > [If you don't invest in the woman, empower her, give her the things she needs to lift her family up, you're just not going…](https://sms4smile.com/quotes/melinda-gates/if-you-don-t-invest-in-the-woman-empower-her-give-her-the-things-she/) [Melinda Gates](https://sms4smile.com/quotes/author/melinda-gates/) > [The income effects in an economy always sum to zero.](https://sms4smile.com/quotes/arthur-laffer/the-income-effects-in-an-economy-always-sum-to-zero/) [Arthur Laffer](https://sms4smile.com/quotes/author/arthur-laffer/) > [Too-easy credit and millions of bad loans made during the U.S. housing bubble paved the way for the financial calamity and Great Recession that…](https://sms4smile.com/quotes/mark-zandi/too-easy-credit-and-millions-of-bad-loans-made-during-the-u-s-housing/) [Mark Zandi](https://sms4smile.com/quotes/author/mark-zandi/) > [In the economy of the cuckoo people that populate central banks, everything is possible. 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Frank](https://sms4smile.com/quotes/author/robert-h-frank/) > [Some societies are also more optimistic than others: the U.S. and Australia are my two picks Tell a European you think there’s a housing…](https://sms4smile.com/quotes/jeremy-grantham/some-societies-are-also-more-optimistic-than-others-the-u-s-and/) [Jeremy Grantham](https://sms4smile.com/quotes/author/jeremy-grantham/) > [“Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble,” cried New York Times columnist Paul Krugman in 2002.8 And that’s…](https://sms4smile.com/quotes/yaron-brook/alan-greenspan-needs-to-create-a-housing-bubble-to-replace-the-nasdaq/) [Yaron Brook](https://sms4smile.com/quotes/author/yaron-brook/) > [From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered…](https://sms4smile.com/quotes/ron-paul/from-the-great-depression-to-the-stagflation-of-the-seventies-to-the/) [Ron Paul](https://sms4smile.com/quotes/author/ron-paul/) > [If we had created rules to automatically turn up the required down payment on a home when there's a housing bubble, or just say…](https://sms4smile.com/quotes/bill-foster/if-we-had-created-rules-to-automatically-turn-up-the-required-down/) [Bill Foster](https://sms4smile.com/quotes/author/bill-foster/) > [In fact, I'd say that the sources of the economy's expansion from 2003 to 2007 were, in order, the housing bubble, the war, and…](https://sms4smile.com/quotes/paul-krugman/in-fact-i-d-say-that-the-sources-of-the-economy-s-expansion-from-2003/) [Paul Krugman](https://sms4smile.com/quotes/author/paul-krugman/) > [“Consider the recent financial crisis and its link to faulty reward systems. 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