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We have reached the part of the cycle that requires us to pay down the debt in order to get to a point that we can start the cycle over again. We in America are in the position of being able to print down our debt and inflate it away. This is because our debt is valued in US dollars. This is an effective option but not the best one.
I have looked at how to pay down the debt and have economic growth at the same time. This requires a different king of approach. What it would require is printing about 3% of GDP worth of money (about $450Billion a year) and then not letting that money cause inflation. How you keep printed money from causing inflation is to keep it from circulating in the economy. The point that the money needs to be injected into the economy in order to keep employment high is in the consumer spending department. So everyone would have a debt card that would get refilled when there needs to be more money put into circulation.
How to keep the new money from circulating. Require banks to keep a minimum balance in the federal reserve bank. Print $1T require the total balance to go up by $1T.
Having said this having a 200% wage inflation will do wonders for making the required pay down less painful. It will also help with the national debt.
It should be possible to have debt pay down and economic growth at the same time.
take a look at the recession of 1921, it only lasted a year because the goverment did nothing at all. then look at the depression of the 1930's, hoovers and fdr's depression. it went on and on until WWII started, 11 years from 1930 until 1941. that is a long time to be in a depression, all because the goverment interfered in private business.
take a look at the recession of 1921, it only lasted a year because the goverment did nothing at all. then look at the depression of the 1930's, hoovers and fdr's depression. it went on and on until WWII started, 11 years from 1930 until 1941. that is a long time to be in a depression, all because the goverment interfered in private business.
Looking at recessions without understanding the structural differences and then proclaiming that one set of policies worked or didn't work should get you bounced out of even a high school econ class.
Not that anyone doesn't care (all though I suspect many don't) but obviously you've give this some thought and study, so I think that you are being a bit overly impatient.
If I get the time to look over your arguments, I might give it a shot at a later date. Right now all I have time to do is write a few little quips here and there and try to keep up with threads that I am highly involved in already.
Are you saying the government should double everyone's salary, and stick a debit card in their pocket?
Yes and no. Pushing hard on minimum wage as the high paying jobs are moving over seas and being replaced with lower paying jobs. That will help some. But simply doubling everyone's salary is beyond the scope of the government. Having a 200% inflation. That is something that the government can do.
Quote:
Originally Posted by little elmer
That's basically what they've started to do with their stimulus package - but that's not going to cure our debt.
Yes it is kind of sort of. What they are doing is really in efficient and wasteful. It needs to be done much faster and with less waste and corruption. As far as curing our debt the paydown is going to be really painful. It will make the great depression look like a walk in the park by comparison. so....
Quote:
Originally Posted by ovcatto
Looking at recessions without understanding the structural differences and then proclaiming that one set of policies worked or didn't work should get you bounced out of even a high school econ class.
Thank you. That is a very insightful way of putting it.
Quote:
Originally Posted by ovcatto
Not that anyone doesn't care (all though I suspect many don't) but obviously you've give this some thought and study, so I think that you are being a bit overly impatient.
I was looking at it going buy with out anyone commenting on it and then have it be forgotten. As far as thought and study well this is what I've come up with after reading about it and studying it for about a year at 4~5hrs a day. A little bit of effort has gone into this one.
Quote:
Originally Posted by ovcatto
If I get the time to look over your arguments, I might give it a shot at a later date. Right now all I have time to do is write a few little quips here and there and try to keep up with threads that I am highly involved in already.
take a look at the recession of 1921, it only lasted a year because the goverment did nothing at all. then look at the depression of the 1930's, hoovers and fdr's depression. it went on and on until WWII started, 11 years from 1930 until 1941. that is a long time to be in a depression, all because the goverment interfered in private business.
We've already gone too far down the Hoover/FDR path to turn back.
They should have just let GS and JPM go bust as well as GM/Chrysler and support the others that didn't gamble and had more solid business models.
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