Why more debt solves our debt problem faster

[ilia25]

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

 

[iamwhatiseem]

Not this shit again...you ever hear of Europe?
Ring any bells?

 

[CrusaderFrank]

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

 

[PoliticalChic]

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

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

 

[Wiseacre]

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

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.

 

[CrusaderFrank]

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

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.

Japan lost not one, but two decades following Krugmanomics

 

[Wiseacre]

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

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.

Japan lost not one, but two decades following Krugmanomics

And working on the 3rd, I read they're going to raise taxes there?

 

[CrusaderFrank]

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

 

[CrusaderFrank]

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.

Japan lost not one, but two decades following Krugmanomics

And working on the 3rd, I read they're going to raise taxes there?

Clearly, they're still reading Krugman

 

[ilia25]

Not this shit again...you ever hear of Europe?
Ring any bells?

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 lost not one, but two decades following Krugmanomics

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

 

[CrusaderFrank]

Not this shit again...you ever hear of Europe?
Ring any bells?

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 lost not one, but two decades following Krugmanomics

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

I see: Japan successfully reversing deleveraging for going on three decades and still have figured you cant borrow your way to prosperity

 

[ilia25]

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

No, it is like saying that sometimes you need to fight fire with fire.

You can keep inventing irrelevant analogies and crying about theories not making sense -- but only if you are too stupid to get through the very simple logic. In a depressed economy paying off the debt makes your income lower. It is counter-intuitive on the surface, but it makes perfect sense once you actually think about it.

Except some people can't think -- repeating the bumper sticker slogans is the top of their mental capacity.

 

[DSGE]

Monetary policy too slow? That's ridiculous. Who can react faster and more effectively to falling nominal income: a committee specifically designated with the role of guiding the nominal economy who meet every 6 weeks to adjust policy and can print as much money as necessary; or a congress who couldn't pass a doobie at a drum circle?

The argument regarding monetary policy is that it's ineffective due to the liquidity trap; which is complete bullshit.

 

[CrusaderFrank]

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

No, it is like saying that sometimes you need to fight fire with fire.

You can keep inventing irrelevant analogies and crying about theories not making sense -- but only if you are too stupid to get through the very simple logic. In a depressed economy paying off the debt makes your income lower. It is counter-intuitive on the surface, but it makes perfect sense once you actually think about it.

Except some people can't think -- repeating the bumper sticker slogans is the top of their mental capacity.

It makes no fucking sense at all no matter how many times you repeat it.

You've confused debt with income, I did the same thing when I bought massive amounts of stock in Global Crossing, they classified their debts as income and expenses as liabilities...it's a sham, it never works and you would think that when something comes with a 100% Guaranteed Fail Rate you'd learn at some point.

 

[ilia25]

Not this shit again...you ever hear of Europe?
Ring any bells?

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 lost not one, but two decades following Krugmanomics

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

I see: Japan successfully reversing deleveraging for going on three decades and still have figured you cant borrow your way to prosperity

What lost decades?

 

[ilia25]

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

No, it is like saying that sometimes you need to fight fire with fire.

You can keep inventing irrelevant analogies and crying about theories not making sense -- but only if you are too stupid to get through the very simple logic. In a depressed economy paying off the debt makes your income lower. It is counter-intuitive on the surface, but it makes perfect sense once you actually think about it.

Except some people can't think -- repeating the bumper sticker slogans is the top of their mental capacity.

It makes no fucking sense at all no matter how many times you repeat it.

Does too -- no matter how many times you deny it.

You've confused debt with income

No, I haven't -- I have just reminded you that you need an income to pay off the debt. And if your income is falling, that makes it harder to pay.

 

[ilia25]

Monetary policy too slow? That's ridiculous.

We had this argument before, and I explained to you what "too slow" means in this context -- Fed not willing to help beyond lowering the nominal rates to zero, which is not enough to keep up with deleveraging.

 

[DSGE]

Monetary policy too slow? That's ridiculous.

We had this argument before, and I explained to you what "too slow" means in this context -- Fed not willing to help beyond lowering the nominal rates to zero, which is not enough to keep up with deleveraging.

We have? I don't remember that...

So the Fed is too hawkish to ease further. They're also very close to their explicit inflation target of 2% PCE. Why do we assume that fiscal expansion won't be offset with tighter money to keep inflation on target?

 

[DSGE]

Monetary policy too slow? That's ridiculous.

We had this argument before, and I explained to you what "too slow" means in this context -- Fed not willing to help beyond lowering the nominal rates to zero, which is not enough to keep up with deleveraging.

Also, even then, why on earth would we be pushing for fiscal stimulus? If congress is to do anything it should be to create repercussions for the Fed if it fails to fulfil its mandate. The solution to a malfeasant Fed isn't to have congress do their job for them. Are we to expect congress to take up the slack and pass stimulus in a timely manner every recession in the future where the Fed is laying down on the job, or should we only need to rely on congress to act once in making the Fed accountable?

 

[eflatminor]

...we need the government to slow down the deleveraging...

I'm sorry but did you just imply that the US is slowing down it's spending and borrowing?

You have some evidence of this?