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You keep mentioning this all the time. Who said that we need to pay off our debt?
Usually, it's the people who think that national budgets are the same as household budgets. These are often followers of politicians who proclaim that the federal government should have to balance its budget just like you do. This is called "lying for votes".
As for your hopes to see more Great Depressions and World Wars, well.....
Usually, it's the people who think that national budgets are the same as household budgets. These are often followers of politicians who proclaim that the federal government should have to balance its budget just like you do. This is called "lying for votes".
As for your hopes to see more Great Depressions and World Wars, well.....
Learn from the history. Our total debt to GDP is about 330% today. That is terrible. In the Great Depression we were around 300% to GDP. By 1947, we were at 130%, which is the ground floor. That came after a Great Depression, and a world war, after we gave up trying to pretend that debt did not matter. Now we are back pretending. The central banks have done the worst thing possible since 2001, create MORE debt. Of course, the banks want them to create more debt, because debt is the lifeblood of banks.
130% total debt to GDP is our goal and can only be reached quickly with A LOT of debt destruction, a lot of companies on Wall Street and on Main Street going under. A lot of individuals breaking apart. We should have begun this process in 2001 when the Business Cycle ended. Instead, we refused to face the truth and tried to prolong the Business Cycle by encouraging more debt.
Too much debt is like too much gravity of matter. It stops expansion in its tracks. We need to learn that the world doesn't necessarily work the way we want it too. We have to stop being children, wanting to have everything the way we like it. It is a discipline to learn how the world works. Our wishes need to be left at the door, personal and global wishes.
Addressing oversized debt (assuming for the moment that our debt is somehow oversized) by deflation is simply absurd. If you want to reduce debt, you need inflation. How does slashing national income and causing a depression fix debt? How does stopping economic growth help debt? Your solution so far seems to be, "we must be willing to take drastic, unpleasant steps to reduce our debt; intentional deflation is drastic and unpleasant, therefore we must do it."
Quote:
Originally Posted by Gtownoe
To the bold, I highly doubt the avg. consumer is going to try to guage, or be able to guage when the dollar will bottom out. I would say a much more likely scenario than saving for prices to go down, would be saving until certain items are affordable.
If deflation occurs in major markets 1st (let's say housing), then it could spur spending in other areas as American's #1 expense would decrease.
If you think decreasing home prices would do anything other than trigger a minor depression at best, I refer you to the past eight years.
Sigh...but that also means you can pay your workers less, or just leave it flat. So that mortgage? Its going up every year. Maybe not the actual amount, but your ability to pay it goes down. With inflation it drives your income up in general though, making the mortgage lower year after year.
How does inflation drive your income up? It hasn't happened in the past 8 years.
Addressing oversized debt (assuming for the moment that our debt is somehow oversized) by deflation is simply absurd. If you want to reduce debt, you need inflation. How does slashing national income and causing a depression fix debt? How does stopping economic growth help debt? Your solution so far seems to be, "we must be willing to take drastic, unpleasant steps to reduce our debt; intentional deflation is drastic and unpleasant, therefore we must do it."
From where I sit, it all looks like the same misguided psychosis as the masochistic nonsense of 2008 that called for letting the global economy crash and burn so that "White Knights" could eventually ride in and rebuild things "the right way". What a lot of rubbish!
From where I sit, it all looks like the same misguided psychosis as the masochistic nonsense of 2008 that called for letting the global economy crash and burn so that "White Knights" could eventually ride in and rebuild things "the right way". What a lot of rubbish!
You are simply a defender of the idea that everything is ok, it's all good, don't worry be happy. Not much reality there my friend. Our economy dies every certain number of years. This is nothing new. Our ancestors have lived through this death process, and emerged from it reborn and re-energized.
Why are we so afraid, and believe that taxpayers have to bailout every company that fails -- or at least all the big companies? Companies that survive deflation and nongrowth season deserve to keep going; those that don't survive deserve to be replaced by newer, better companies. That is evolution.
The system of private debt being bailed out by taxpayers mean private entities never have to grow and face the music for their misdeeds or mistakes. What would have happened if we had not BAILED OUT our auto industry in 2008 through TARP? I think new auto companies would have risen up to replace them.
When you bailout companies because they exist you add moral risk to the process -- making the companies like rich kids whose parents always bail them out when they break the law -- they never grow up.
We should not be so afraid of change. Change is what makes America great, a willingness to change, and to face uncertainty with the understand and trust that human creativity will rise to the occasion.
You are simply a defender of the idea that everything is ok
With very good reason, I'm a proponent of the idea that little attention should be paid to alarmist, heterdox, balderdash.
Quote:
Originally Posted by Dr. Kevin
What would have happened if we had not BAILED OUT our auto industry in 2008 through TARP? I think new auto companies would have risen up to replace them.
Only Ford could have continued to operate at all. GM and Chrysler would have had no choice but to turn out the lights and go home. An estimated three million jobs would have been lost within a year of that.
Quote:
Originally Posted by Dr. Kevin
We should not be so afraid of change.
Because what you advocate is unambiguously change for the worse.
You are simply a defender of the idea that everything is ok, it's all good, don't worry be happy. Not much reality there my friend. Our economy dies every certain number of years. This is nothing new. Our ancestors have lived through this death process, and emerged from it reborn and re-energized.
It's not necessary to think the economy is okay as it is, to realize that your proposed deflation is probably the worst thing we could do to the economy that doesn't involve setting off literal bombs.
It's not necessary to think the economy is okay as it is, to realize that your proposed deflation is probably the worst thing we could do to the economy that doesn't involve setting off literal bombs.
What is our alternative Frank? Zero interest rates for the rest of our existance? How about negative interest rates? Why so much terror worldwide today from the threat of a rate increase? Look at the corner we are in. We have to keep interest rates as low as we can get them because we are carrying way too much debt. The Fed is talking about negative rates now. How did we come to this? We listened to the geniuses who told us that debt levels did not matter. We're still listening to them. Why?
Deflation will only save us, nothing else. Deflation saves us from debt, so we can start again. You seem to assume that suffering is not necessary, darkness does not need to come. When you take out private debt of 330% to GDP this is going to necessitate a lot of suffering, a lot of darkness. No way around it.
Debt is spending someone else's money, some future generation's money, perhaps not even born yet, so we can have the pleasure of spending money we don't have. Let the strong dollar destroy everything. We've need deflation since 2001. It's built into the system. It is painful, yes. But what goes up goes down. We've been stalling since 2001, pretending we could trick our way out of it. We can't. We need to stop being cowards and face the truth, allow Deflation to do it's job!!!!!!!!!!!!!!!!!!!
The alternative would be to ignore crazy rants about self-flagellation and implement an actual solution.
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