[ExI] Debt tsunami
pharos at gmail.com
Mon May 4 10:55:16 UTC 2009
On 5/4/09, Brent Neal wrote:
> This may be exactly the right thing to do. In a deflationary cycle, you
> -want- an inflationary fiscal policy to prevent a downward wage-price
> spiral. No doubt, I'd be a lot more comfortable with this if we'd managed to
> sock more money away in the Clinton-Bush years. You know, like good
> businesses/people/gov'ts ought to do - save during the fat years to prepare
> for the lean. But with Bush II dumping dollars into the desert like a
> madman, alas, it was not to be. We'll have to hope that the investments
> we're making now will pay off well enough to cover the bill later.
That hope is exactly what has caused this economic collapse.
'Spend now, worry about paying the bills later', has been the way of
life for the last ten or so years.
Now that the house of cards has collapsed, people are saying that the
motto now is
'Pay my debts off first, then try to save some rainy day money, then
*if* cash is available, buy something'.
Economists call this deflation. The people call it survival.
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