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Steve Keen On Why Debt Matters "All The Time" And The Need For "Quantitative Easing For The Public"
Following his somewhat epic blog debate with Paul Krugman, Steve Keen appears on Capital Account with Lauren Lyster to debunk more Keynesian propaganda and the kleptocratic status quo 'debt doesn't matter' arguments. Poking holes in the stable/exogenous shock equilibrium 'model' versus the real-world's dynamic systems, the Aussie economist warms up with the zero-interest rate conundrum and liquidity trap (at around 7:00); moves on to the empirical falseness of the debt-to-unemployment relationship (at around 11:00) - implying 'debt matters all the time' as Keen explains common-sensibly (but not Neoclassically) that the 'change in debt adds to demand' and that involves banks which breaks modern economic theory (since lending is credit creation not savings transfer).
Echoing the deleveraging from the Great Depression, it could take 15 years of unwinding this epic debt bubble before its all over - but not if the status quo of deficit spending is maintained - as Keen somewhat controversially concludes (at around 13:00) "you can't just cure this with deficit spending [since debt is already beyond the black-hole's 'event horizon'], you have to abolish the private debt as well" by "quantitative easing for the public".
Student loan debt and delinquency is also discussed and its self-referential ponzi-like nature (at around 16:00)...
Keen discusses his controversial idea of a debt-jubilee and the Debt Black Hole 'event horizon' that we are already in at around 19:00... (and notably at 24:30 he discusses how to avoid the 'moral-hazard' of a modern debt-jubilee with no 'advantage' to being in debt)
At around 20:30, Keen relates the drop in bankruptcies to the low interest rate environment warning that this will just lead to an endless zombie state like Japan...
Lie-borgate is discussed at around 21:00 with his view being that the outright fraud confirms his feeling that these bankers are behaving like a parasite on the host of the economy...
"The [quantitative easing for the public] solution is not easy and not straightforward but unless we do it we are stuck on wrong side of the debt black hole's event horizon"
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A good man, Mr. Keen...
But,
economic theories of any variety are quite useless in a situation where ignorance, self-absorption and criminal intent not only rule the day...
but ruled yesterday, which got us here...
and rule the tomorrows, 'til such nasty forces are squelched.
Choose your theory -- and perhaps consider the Chaos one as being most appropriate.
In a similarly philosophical vein,
The notion that more central planning now can solve the problems caused by decades of central planning prior strikes me as (1) insane, (2) arrogant, (3) deliberate chicanery and hucksterism, or (4) all of the above.
Man, if Keen is right why stop at 5 or 10 grand per taxpayer. Go the whole Krugman and send us all $5 million. We pay off debt AND goose the economy like it has never been goosed before, right back to prosperity.
Yes, but, no. You bail the banks as well. Reboot. Level playing field again. Growth we can all believe in, <s> I know. But it's the only way to save their system.
"Man, if Keen is right why stop at 5 or 10 grand per taxpayer. Go the whole Krugman and send us all $5 million. We pay off debt AND goose the economy like it has never been goosed before, right back to prosperity."
If you want to see a Weimar Germany hyperinflation first hand then by all means TPTB should send all Americans $5 Million.
Overnight there would be too much fiat chasing too few goods.
I believe a debt jubilee to wipe out current debts, both public and private, is a good idea... but sending fiat to fools that would piss it away on toys (more misallocation of capital) and create hyperinflation is a stupid idea.
But didn't he say we are in deflation? So a little inflationary action can't hurt, right?
Someone writing off a loan to a Ferrari you can't afford doesn't address the fact that you shouldn't have bought the Ferrari in the first place.
Debt is a symptom of the welfare warfare state. The disease is the spending. Unless this debt jubilee accompanies a dismantling of the death star, it has no more substance than a standard Keynesian spending spree.
Bingo......
What would stop all those that have been living way beyond their means, to grab a new credit card and go on a spending spree. And what would happen to those that don't carry debt? I sure hope they give me a heads up before something like this goes into effect so that I can go out and get debt so I can write it off.
I don't understand.
If you are in debt and this here Jubilee writes you a pile of money and you use it to pay off the debt.
There should be some left over to you so you can stabilize your life each month in the black.
THAT will be a productive citizen and not a old school ward of the system who is provided an apartment etc.
I imagine those living in the Projects would move as fast as they can get out. That will build some sales for homes.
Yes, it would build homes and within a couple years reduce every area they move to into a new ghetto. Its been done before. Level the project, build a nice new housing complex in the 'burbs someplace, and let the former project dwellers live there rent free- then stand there scratching your head when the new area is a complete cesspool in two to three years with formerly safe areas rocketing in crime and the formerly decent schools are zoos.
I must be living on another planet. One where my neighbors come outside to pickup the storm damage after a rain.
I have seen some of these projects around the USA and all of them did not look as good as the Soviet ruins on ZH.
If a people cannot take care of themselves (Witness many homes anywhere filled with trash...) then they must be taken care of by a Fudicary.
I spent my formative years in a school that was built by the state as matter of law and taken care of by the State each year. There were people present everyday whose task was to ensure the school did not consume anything financial such as boiler fuel etc each month more than what the State budgeted.
Some classmates of mine (And I remember them all.) eventually vanished from our school due to mental damage or other reasons. They are probably spending their years in another facility designed to keep them safe.
When you consider that they are warehoused most of their natural life, your life and freedoms mean that much more and worth fighting for.
I liked what he had to say but how do you get Bill Black back. The ones at the front and top of the fraud, those that are most responsible for the future of world economics, the ones that have created trillions in fraudulent debt instruments and that control governments worldwide couldn't give a F about what Steve Keen may know or not know. They have lawyers and politicians and armies. But Keen is doing a great service by putting the truth out so that politicians and economists can gain the support to...ARREST them.
That would imply they care. They don't. QE for the public is a great daydream though.
A modern debt jubilee is a fantasitic idea. I have mentioned to friends that the government should do something like this to clear the bad debt from the boom years.
The counterarguement I get is:
1. Moral Hazard
2. Would be hugely inflationary
I don't agree with either. Sure there was a lot of greed in the boom years, but there were also a lot of honest people who were suckered into overpaying for houses. Saddling themselves with debt for the remainder of their lives.
The inflation argument doesn't hold water either. The inflation was all in the past in the form of housing prices. Elevated debt created a huge stagflation that didn't register with the morons at the BLS because they removed housing as an expense when calculating inflation.
It certainly would be a shock to the system if suddenly you had to have money to buy what you want. I view this as the exact opposite of moral hazard, so the first argument against debt jubilee doesn't make any sense to me either.
And then all the people who weren't profiting from it in the financial industry or living way beyond their means with mounds of debt start looking for ropes with a noose at each end for both of those two groups.
Another counter argument:
Like Krugman, Keen wants to protect the Status Quo.
As if nothing has happened....the Mandarins have spoken...
Take QE to thew maximum to see how absurd it is.
Eliminate all taxes and simply print unlimited money to pay all bills. A stimulus Krugman could love... and a sure way to destroy America as we (used to) know it.
"..Keynesian propaganda and the kleptocratic status quo 'debt doesn't matter' arguments.."
You've nailed it boys
Who distributes this nonsense? Why the debt-spending junkies (politicians) who have no control over their ambitions/spending/vested interest groups and of course the bankers who want everyone indebted (slaves)
every economic issue is to be perverted and propagandised to perpetuate and prolong this merry-go-round of perpetual debt to enrich the ingratiated parasites feeding off the productive economy via those criminal pipelines of Govt and the monopoly on money
we will not have a healthy (free market) economy until we rid it of the cancerous parasites sitting atop the 2 barberous relics, Govt and central (privately/perversely controlled) banks
http://bradpoulos.com/2012/06/fiat-money/#comment-3302 explains why printing paper money only benefits the wealthy .001%
Seems like a good idea, based on how epic the resulting fail would be.
Certainly no worse than the slow bleed towards serfdom.
It's gonna be an epic fail with or without this idea.
Bankruptcy, prosecutions, and outlaw derivatives. No need to reinvent capitalism. Liquidate the insolvent banks and prosecute the banking thieves.
I heard and don;t know for sure if it's true but over 1800 bankers were supposedly jailed during the S&L crisis. Not one has been jailed by Bush or Obama.
If a bank is insolvent they need to be taken under.
The derivatives that have been written need to be outlawed going forward because they provide zero for economic growth. Oh sure they can be a useful hedge for banks to hold everyone captive.
Better still, bring back public Guillotinings.
BTW, derivatives do add value by facilitating liquidity.
One, these people are not stupid. Therefore, they are either delusional or playing a game that benefits those in charge.
Two, debt cannot be resolved by creating more debt. Therefore, all money created to resolve the debt will cancel some debts more than others, depending on how it is dispensed- or to whom...
Three, the school of economics is having a Copernicus moment, the Keynsians etal are the church and until we stop seeing the earth as the center of the universe, we cannot move forward. Copernicus was an Austrian.
Four, debt jubilees are temporary instruments of great liberty, but they fail to resolve the issue of people's proclivity to create more debt than savings and the inevitable consequences.
Five, there is a price for civilization and the number of people it is dispersed to. That price is tyranny for those participating and great luxury for those directing it.
Six, all growth is the result of new opportunity. Whether in new resources, new technologies or new lands. When the global population needs are greater than the available resources, growth is impossible. While new efficiencies can delay the effects, they cannot cancel them altogether.
Seven, in the final analysis, debt must be personal and the responsibility of each holder- regardless of the consequences. Otherwise, the feedback loop is interupted. Without a feedback loop, there can be no discipline. Without disipline, life loses momentum and meaning.
Eight, the tools of tyranny are: government, police power, law and bankers in charge of currency.
Nine, we cannot test new solutions until we eliminate the roadblocks that stand before us.
Ten, there are no utopias. People are imperfect, so shall their societies be. The questions is: How do we construct the best society ? This requires we settle on a list of goals that are attainable and sustainable. So far, everything we have tried is a massive failure for the majority of people.
Perhaps the solution lies in ignorance? Where we fail to understand the tyranny that confronts us. Maybe it lies in escape? Where we take no responsibility and protect our selves and loved ones, but let all the rest go to hell. Perhaps it lies in hope and naivete? Perhaps it lies in joining ranks with the Elites? Maybe there are no solutions. Maybe we have to do the best we can, live, love, laugh and when the time comes, make sure we go out on top...
if i may take you up on some points:
"When the global population needs are greater than the available resources, growth is impossible."
Resources are not the problem. America and Europe can both produce feed 30% over their annual food needs. Why can't anyone else?
Etheopia gets hit with a drought cycle every 6-8 years, that's been going on centuries. So why does Etheopia suffer while desert cities Las Vegas, Bagdad and Dubai breeze through the same scarcity of water?
Investment in a modern solution, that's all it takes. Resources fixed, this is a non-issue.
"Eight, the tools of tyranny are: government, police power, law and bankers in charge of currency."
Agree 100%. Govt is the problem, not the solution.
"How do we construct the best society ? This requires we settle on a list of goals that are attainable and sustainable. So far, everything we have tried is a massive failure for the majority of people."
Firstly there is no "society" it is a generalised tag that, like the staticians average man, actually describes nothing (real).
We are individuals. We interact as individuals on other individuals, just like natures billions of individuals/animals/insects/etc, we do not act in any wider sense whatsoever as a "society". So society dos not exist except in the broadest sense therefore no rules may be made for society.
We are designed to be self-sufficient and self-governing, just like nature. We make our own rules up as we go along, in fact there's no rules, we just interact with others in a social or commercial way
What you describe as a "massive failure" is actually the massive failure of the institution of Govt. The political erection of a God in society to Lord it over "society" (power over individuals) and make decisions for them that no individual in his right mind would make.
Govt is the massive failure of collectivism and idealism that, like the average man, represents nobody and does not exist. Govts entire precept both to "represent society" and Lord-it over people are pure folly, pure arrogance and inane liberal/academic/philisophical dribble to boot
Govt is also the massive failure of '1 Policy' types that think one answer suits everyone in society, or should be forced down every free mans throats, when in fact society (individuals) are designed to come up with hundreds if not millions of different answers and ways of behaving. Every one suited to each individual and not some lame/false/deceiptful tag to represent everyone when in truth it only represents the desire of the rulemakers/lawmakers/toerags behind Govt desks and their vacuous 'authority' (abuse of others personal freedoms to decide for themselves)
Society is civil naturally (like nature). We all want to get along. It is Govt that disturbs the peace, slows progress and wrecks the economy with its parasitical theft of other peoples money. Until you get like Greece and Egypt, people in dispair fighting against the Govt to rid themselves of the wrecker of civil (free from Govt laws/rules) society and free of its authoritarian abuse of peoples freedoms
the West is failing as a direct result of its inane belief in 'democratic Govt' as a problem solver and wise manager when in fact Govt is but a corrupt, cancerous and destructive monopoly on society and the most ignorant/dumb institution ever devised (it knows jack-shit about anything, is expert at nothing)
Govt is the barbeous relic of our history ...time to flush this human toilet down the sewer
+1. Bravo! My sentiments exactly.
Though, sadly, government is the cop-out for those who are too lazy to make decisions for themselves ... then suddenly find the energy to complain when the government, inevitably, comes up with a decision that they disagree with. What a joke!
There is no 'global' solution to this massive failure of central planning. The only practical solution is for each local community to rebuild from the ground up and re-form alliances as they see fit.
The fuckwits who have been engineering the 'New World Order' just cannot see how ignorant and hubristic their "smartest guy in the room" tag that they give themselves has been shown to be. LOL ... "Dumbest apes" would be more appropriate!
Yet, the world's population lies in those "other areas" of the world. While frankenfoods have created an efficiency (if you consider poison an efficiency) there are still food shortages around the globe. Growth would require access to resources in excess of what we are accustomed to- we do not have that, especially as the population continues to grow.
Second, europe imports most of its' grain needs, so where your 30% figure comes from? There is a reason nations are buying foreign land resources for food production. Growth requires a constant discovery of new resources beyond current needs. Impossible. You either find new sources or decrease demand by eliminating population.
Societies are a constant amongst mankind and nature. They exists because they provide greater security, whether in animals that form herds (herbivores), predators that hunt in packs (Lions, wild dogs, wolves, etc) Insects, Birds or mankind (we live in cities and create civilizations). While there are many creatures that live alone or can live alone, that does not mean societies are artificial constructs.
If you honestly question the people around you, you realize that people are incapable of imagining life without government, much less systems of voluntary community. Like Monarchy before it, Republics, Constitutional Republics, Democracies, Theocracies and Dictatorships have become the only organizing strategies we consider. We have failed to move beyond Plato's Republic.
This dissatisfaction has resulted in revolution in the past and present. However, we still lack any new organizing principle that provides the security and efficiency we desire without the tyranny we despise. All revolutions have yielded the same results: new leadership, new promises, new tyrannies.
The question is: how do you honor universal sufferage, while guranteeing individual liberty? It would be a perfect balance to be maintained by an imperfect species. I would suggest that nature provides the best examples, but these examples lack a level of security we often desire. We are a creature of the planet and the ecosystems that are its' make-up. Any attempt to operate outside this paradigm is likely to result in failure. The state of nature is liberty, species organization for security with zero guarantees of survival, thus insuring only the best able to adapt survive. This strengthens all species and leads to a more vigorous health in everything.
While nature has its' system failures , they usually are self correcting. In a world ruled by chaos, this may be the best we can ask for.
Sean, just so you know, I was numero uno on this last night...though I was a little puzzled how imperfect people (we certainly are that...lol) can ever agree on or devise a better society.
It was still a home run my man ;-)
Thanks nmewn. It is a difficult problem. though I like to think that we can all make a contribution.
It is a difficult problem.
We have to all recognize each of us contains at least two drops of larceny in our bloodstream...some of us much much more. Some of us have no conscience whatsoever, while some think we are here to resolve all issues imaginable everywhere through war or rice.
Most I believe are somewhere in the middle.
But as we have seen, our adversaries will make the argument that the continued ponzification of still more debt is humanitarian as it feeds the social safety net or prevents tyranny elsewhere, thus a virtue to them. A devilish device to be sure, relying on the principle of don't make the slavemaster mad or you won't eat tonight.
Slave or free man should not entertain these notions knowing the manipulation involved...but for the ones it is directed at, it is a compelling argument as it feeds the larceny in us all.
It may be an intractable problem until the inevitable reset.
Unfortunately, the inevitable reset will require an appeal to the passions of the people, in a way that allows them to overcome said ponzification and "take a chance" on something new.
This has never been the people's strong point. Revolutions are started by competing power groups, and while using the people for cannon fodder, they merely are displacements or alliances among the same elites. Whether it is barons and kings, monarchies and merchantilists or dictators and military juntas.
Pastoral societies in competition with developing city governments saw grass root revolutions, resulting in the "debt jubilee" as an escape hatch for ruling elites, but we don't have a lot of pastoral people now.
For me, the revolution must be created through the devolpment of new models that people can see, feel and touch. The combination of living within nature coupled with community voluntaryism has real appeal. It emphasizes the connectivity of small communities with the sustainability of living within the constraints of nature to produce goods and services that replenish earth and all her inhabitants- yet requires an absolute minimum of organization, with said organization based on decentralization.
Conflict is resolved through arbitration and consultation. Goods and services have values based on personal preference. Exchange is completed through a combination of social credit and freely determined asset value items. Communities provide a level of protection consistent with the most security possible in an impossible world, while organizing in a way that meets the needs of all the participants (otherwise they would leave).
Yea by the Sins we die and also live.
Holy shit Steve Keen is boss sauce!! Oh, and Lauren Lyster is smokin!!
Lauren IS hot, and capital account is probably my favorite financial show. Oh, and did I mention Lauren is hot?
QE for the public is exactly what the eminent domain idea so ridiculed by ZH a few days ago was.
Except from what I understand, only the people with debt benefit from the eminent domain idea. QE for the people benefits those with and without debt equally; those with debt just have to pay off their debt with the distribution before they can spend it in the economy. I like the idea of debit cards good for a certain length of time. They could be put out in increments so that any inflation issues could be addressed before getting out of hand.
They could be put out in increments so that any inflation issues could be addressed before getting out of hand.
**********
The so called debt cards could and would also be front run by retailers in increments and then watch prices sizzle higher-
There are no inflation issues because it would be in fact- genuine inflation and it would be out of hand-
I wish people would stop saying "money printing" and use the term "counterfeiting". Counterfeiting always benefits the first spenders who spend prior to the ultimate devaluation. First spenders drive prices up but don't have the incentive to care since it's free money. All the rest of us subsidize counterfeiters by paying those high prices...which is exactly what were doing today.
First Spenders: Banks, Governments.
ps. It's very embarrassing to me as a very loyal American that we have to listen to Russian TV to get real intelligent talk about the economy and current events relative to all the other infomercial financial news that we're subjected to (current ZH company excluded of course)
Or to China TV which really cuts to the quick. Here in the USA.
I have to hand it to the Soviets and Chinese. They got thier shit together having been through collapse and war.
But this is America and we built it from nothing and I refuse to be idle and let this place go back to nothing.
It's very embarrassing to me as a very loyal American that we have to listen to Russian TV to get real intelligent talk about the economy and current events relative to all the other infomercial financial news that we're subjected to
I know the feeling, but it's not hard to understand. Our "entertainment media" can't be challenging or negative because it really only exists to sell stuff, and the sellers don't want the audience distracted. You'd think the non-advertising media might try to serve some of that demand, but they're all owned by the same guys. Risk-wise, they've decided it's best to keep it simple and avoid *every* subject of importance.
our media puts a filter on the mirror withe the net effect that we continue to use it to preen ourselves. RT is just showing us the un-filtered image, same way that we did to the Sovs back in the day.
A Debt Jubilee is one idea but it still feels very unfair to me. There is a big moral hazard aspect to it, even if I get suddenly a wad of cash on my bank. And in future you just raise your children that debt is OK as you will be bailed out in any case? Because the "Mandarins Have Spoken"
Next to that I believe his plan to be super inflationary.
And who is going to take the blame for past macro economic and political mistakes? Right...ehhh..nobody. You might soon be driving in "Ben Bernanke street".
Keens plan is not really far away from Krugman's idea which is to save the status quo...........Nope.
Let the pain come...
Lauren Lyster should interview me and Aloyna can come along too !
The simple fact is in the UK Banks do not lend. They have imposed Monetary Base Control on Households just as the Government relaxes Monetary Base Control on Banks. They are blocking Monetary Policy and acting as a giant Leakage on the Circular Flow of Income. It is simply astounding that in a mass-democracy Financial Intermediaries can obstruct Credit Creation and extract Liquidity from the Real Economy.
This suggests either Mass Democracy is dead or that we are waiting for a Leader who will seize control of Banks by force-majeure and Direct Lending. We are surely reaching the point after 5 years. This is not so much a Keynesian Liquidity Trap and a Bank Blackmail Strategy to seize control of economic life akin to the activities of an Occupying Army or Gangster groups like Yakuza or Triads.
The Banking Mafias that are holding nations to ransom will have to be broken and it may be bombs and bullets to remove the superstructure. Every attempt at Reform in Pre-Revolutionary France and Pre-Revolutionary Russia FAILED. We have tried the political route and it has FAILED after 5 years. It is time to recognise that System Capture requires Purgative Policies and they look to be increasingly of the Violent sort to shift the Inert Plutocracy
Nice post
I like this guy!
But there are two issues: the problem is not debt, it's interest. If interestpayments were frozen now, this would create massive demand in the economy and an immediate end to the depression. Even Greece would be able to pay off her debt in 20 years just by using what she's paying for debt service now.
And second: the moral hazard of a jubilee is real. That's another reason why an interest strike would be better.
I thought this video debunking econonomics from energy/behavior perspective pretty fascinating and spot on (from an oil conference). The apeaker also points out - as Keen does - the credit creation process is central to demand and posits that had societies not been allowed credit, that global oil production would have peaked 20-30 years ago (implying that we would have alot more left)
http://www.youtube.com/watch?v=n4x_CUumdKs
There is guy out there that has been writing about debt creation for over a decade-inflate or die. He concludes that when global interest rates are going to zero, the game for credit creation is about over. That's what Keen means by being trapped in a black hole.
Unlike Keen, this guy does not believe that the system can be saved in any manner--in the end only pits of burning diesel will remain.
Keen never talks about PUBLIC DEBT, its PRIVATE DEBT that he talks about. This is a distinction that few notice. There is a reason for this, but, you must read his work to understand.
Keen believes that credit driven economies can be saved; he is developing economic models that show this--the key in these models is distribution of profits throughout the economy. He shows that debts can be repaid and everyone's income goes up: workers, bankers and capitalists.
The likelihood of such a system being adapted, which relies on income distribution is our predatory economy is unlikely.
his key point is that to fix the economy you have to cut out the bankers and make sure they don't divert the money to themselves.
the war will be between the 99% and the bankers. it will be violent, the issue is who will serve the bankers
Am I the only one here who has a thing for Lauren Lyster?
Oh no-- unfortunately she has yet to respond to my proposals of marriage-- but I'm still hopeful :-}
As a lesbian trapped in a man's body, I would show her what it's like to be an all-day lollipop.
At least until the chloroform wore off.
All agree debts can not be honestly repaid so we either
1) write them off and cause creditors to lose (banks go bust)
2) inflate out and cause savers to lose (most likely to happen
Keen understands write-offs are inevitable so he is suggesting such a write-off (through inflating out) which saves the bankers by punishing savers
Wait.
If a bank lent you money for a home. And HELD THE ORIGINAL NOTE, they get their money back and change all is well.
It IS THE BANKS that SOLD and RESOLD that NOTE on your home to OTHER investors who might even be around the world... THOSE ARE THE ONES who eat the losses.
Believe it or not, there are small banks that do things right. That is the reason they are not big banks.
Keen's version of the broken window theory. Let's give everyone a million dollars. Reqire them to pay off all their debts including the total tax bill of the U.S. (hey why not the world) then it's all good right? Can't anything possibly bad happen when you print that much right? Oh, wait, didn't ALL of those countries that did just that go up in flames within minutes ha! Now where are my confederate dollars at?
Fantastic,mr.Steven Keen!
So Libor(Blair and Browns favorit word) is the famos Hockeystick of London economics,and you are the whistleblower.
Hope you win a Nobel price in Honesty.and Zero Hedge deserves one to,all of you.Even dummies can follow the Rabbit,with your Guidence,all the way down the Black Boson!
Mish posted an interview with an Australian economics professor named Steve Keen, who suggests essentially a QE for the public. His idea is to give all individuals $100,000. This money must first be used to pay down debt. If you are a frugal, debt free sort {or a wino in the alley} you simply get a check in the mail. My comment is that this cannot be done all at once {roaring inflation}; but if it's done over a five year period, lets say you get the money on your birthday each of the five years.. this could work very, very well for most and it would'nt simply punish those who save as my plan would. Implementing such a system would be an interesting proposition, however-- would there be an "administrator" who would pay down my debts and/or decide who gets how much ? One thing I'd add is that to avoid such problems from arising again we should implement my 10-1 leverage ratio hand in hand with any such giveaway.
http://themeanoldinvestor.blogspot.com/2012/07/great-reset.html
it may be controversial, but a debt jubilee is much needed and there will be wailing and gnashing of teeth should it occur....one way or another the debt must be liquidated. period.
the problem with debt is that in the limit it is utterly lethal....the debt doesn't matter argument is a puerile fucktardation.....it may not matter at any given point, but in the limit it matters greatly....it is more lethal than the taxes which would have been originally required to fund the (profligate) spending....
when you compound the interest on ever accumulating debt, you destroy everything in its wake because the economy cannot bear it....why do you think that they call compound interest magic? couple that with the debt based currency which has its own pathologies, you can see the wickedness of debt without moral hazard....
the debt jubilee is inevitable the only question is who will pay for it - the creditors or the savers or maybe the taxpayers - yeah those who still work hard
Ah those kookie K-men with their insane ideas (doing the same thing over and over, but expecting different outcomes -- Zimbabwe, Weimar et. al).
Both K-een and K-lugman propose the same solution: manna from heaven. (Actually all voodoo, high-priests of the dismal science believe they are tight with the deities).
"It's raining money", always rings true to the masses.
Re-watch the Gilligan's Island classic, "Neither a borrower nor a lender be. Do not forget: stay out of debt."
Maybe we should just confiscate gold and replace the "store of value" with plastic bags from the grocery.
The devil is in the details and I believe that the jubilee would only apply to certain voting constituents, depending on who is in power.
How can anyone believe that a corrupt system would not produce a corrupt solution is beyond me.
What if everyone chose their own jubilee? Many are already ignoring their house note. Plus, Lauren does appear to have nice tits.
Yup 1-2 decades of slow bleeding. I'm on the edge of my seat! Keep hoarding your silver eagles, or should I say 'silver turkeys'!!
Keen's predictions are consistently wrong. Krugman and the 'saltwater economists" are consistently right.
Those are simply facts.
Print.
Fuckin. Nutso.
Krugman was a guy who proposed accelerating the housing bubble in 2000 after the first dot.com crash. You might say he was "right" in that that is exactly what occurred, BUT....
How well did that work out for everyone?
On one hand is Keynesianism, and on the other over a quadrillion dollars in unregulated derivatives.
I'm always amused when people say that Keen is debunking Keynesian because if you listen to his whole argument, once the existing debt is resolved (through a debt jubilee), he still views the central bank as the primary means to provide credit to the market rather than it coming out of savings. This is the fundamental flaw in his argument since it's more neo Keynesian than anything else.
During the last depression, the banks ended up with 60% of the farmland in the USA. Where did all the money go during dust ups in the market, like with the railroads in the 1800's, or the dawning of the age of computers, the internet...they wait till moms and pops put their chips on the table before they yank the rug. Now that the little guy has wised up, or are too broke to play, it's the treasury they are bleeding dry. It is the end.
There will be no political way out of this. It takes an enormous amount of energy to peel away the layers of corruption and bureacracy in all endeavors of the people, through the government, to provide a better life. None of the decision making authority resides with the people to make it happen. You think you make a difference. You don't. The jackass you send to Washington is going there to make some serious bank for himself. He does not care about you, he wants to keep his job and his position. Rise up through the ranks of power and commitee chairs. Another stratified power structure, and we have all become conditioned to climb.
No matter who wins, you lose. The rot is way too deep. Maybe one day we will stop talking about the obvious and do something. Till then, the decades of slow bleed is a given. There are times I marvel at the prescience of Hollywood. All their snapshots of the future shows us where we're going. Absolute power at the top, while the rest of us deal with the ominous Soylent Green or Carousel like end. We're passing through the Idiocracy phase now, fire more teachers from our already knee capped system. Brawndo comes in 32oz cups...This is fast becoming the picture of America.
http://pinterest.com/pin/64457838387307830/
I am not falling into the mind trap of "moral hazard". We're past any notion of morality now.
this guy's a loon. a tribute to the current make-believe money system. as soon as the treasury sends out checks, tens of millions will wonder why they ever should pay taxes again.
As long as ANYONE can create "money" out of thin air, humans are SLAVES.
Check out todays guardian comment section (available online) for an interesting take on QE
Check out todays guardian comment section (available online) for an interesting take on QE