Why more debt solves our debt problem faster

Discussion in 'Economy' started by ilia25, Jun 27, 2012.

  1. ilia25
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    ilia25 I can do math

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    Here is the short version:
    The problem is that the borrowers try to get rid of their debt way too fast for the monetary policy to counter. This result in falling incomes (depressed economy) and makes it harder to pay off the debt.

    Hence, we need the government to slow down the deleveraging -- by taking more debt -- just enough for the monetary policy to catch up.

    Really, how is putting millions people out of work helps them (or anyone else) to solve their financial problems?

    Here is the link:
    Deleveraging, Monetary Policy, and Fiscal Policy: A Further Note - NYTimes.com
     
  2. iamwhatiseem
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    iamwhatiseem Gold Member

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    Not this shit again...you ever hear of Europe?
    Ring any bells?
     
  3. CrusaderFrank
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    CrusaderFrank Diamond Member

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    We need to borrow our way out of the debt crisis.

    That's like saying the Titanic needed to hit a second iceberg to try to reverse the damage done by the first

    Thankfully, Obama is done and pulled Keynesian stupidity down to the bottom along with his miserable, historic failed fuck up one term
     
  4. PoliticalChic
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    PoliticalChic Diamond Member

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    Obama’s 2011 Budget Proposal: How It’s Spent

    Obama?s 2011 Budget Proposal: How It?s Spent - Interactive Graphic - NYTimes.com

    $3.69 trillon budget proposal

    1. Social Security $738 20%

    2.National Defense $738

    3. Income Security $567

    4. Medicare $498

    5.Net Interest $251

    6. Health $381

    7. Education $122

    8. Veteran’s Benefits $122

    9. Transportation $91.55

    10. International Affairs $67.39
    $3,575.94
     
  5. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Didn't Greece and Japan already try that approach? How'd that work out?

    Millions of people out of work? Isn't that a bit over the top? And linking Krugman, one of the most biased ideological hacks in America, doesn't cut it.
     
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  6. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Japan lost not one, but two decades following Krugmanomics
     
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  7. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    And working on the 3rd, I read they're going to raise taxes there?
     
  8. CrusaderFrank
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    CrusaderFrank Diamond Member

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    When I'm that wrong, I lose real money, Krugman found a way to get paid for being wrong.

    I admire him for making stupid work for him
     
  9. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Clearly, they're still reading Krugman
     
  10. ilia25
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    ilia25 I can do math

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    You must be joking. The European periphery did exactly the opposite -- it tried to cut the budget deficits once its economy tanked.

    See any deference? Cut the govt. spending vs growing them?

    Japan:
    1) Did not have it nearly as bad as the US now, not to mention Europe
    2) Had demographics as one of the main causes for slow growth
    3) Did not do enough stimulus
    4) Keeps borrowing at the world lowest rates despite its enormous debt
     
    Last edited: Jun 27, 2012

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