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necron99
01-18-08, 01:35 PM
You probably don't get too many re-posts from "The Distant Ocean" blog here... but I liked this one (http://www.distantocean.com/2008/01/we-must-avert-t.html)for the power of its simplicity..

We must avert this crisis of responsibility

Serious people are discussing a gathering storm (http://abcnews.go.com/Business/MarketTalk/story?id=4148651&page=1):

The Federal Reserve chairman was on Capitol Hill this morning, testifying at the House Budget Committee about the economic outlook and efforts to structure a program to get consumers and businesses spending again.
One of the most important focuses of Ben Bernanke's testimony and the issue took on the lion's share of the question-and-answer period was about what Congress should do to push the country away from recession. ...
The Fed chairman said if Congress wants to act, it should do so quickly and focus the effort on getting consumers and businesses to increase spending in the next year.
So to clarify what's going on here: after an orgy of profligacy that led to the first negative savings rate (http://www.bea.gov/bea/newsrelarchive/2007/pi1206.htm) since the Great Depression, people (aka "consumers") in the US are spending less. Assuming they're making about the same amount of money, this would appear to indicate that they're either paying off their existing debts or saving money.
Now, to any sane person this would seem like a good thing. But in a well-functioning corporate/state-capitalist system, this responsible, prudent, rational behavior is a serious crisis that must be averted.
That's a lesson worth thinking about.



...[necron99 comment]... of course, things are more complicated than that. But maybe not much more complicated than that. I often find that when the first defense against an unwelcome point of view is to throw up GDP growth charts and obscure 19th-century economic theorists, well, the unwelcome point of view is often closer to the truth... So, can anyone gainsay this without resorting to grad-school Economics material?

Tulpen
01-18-08, 01:57 PM
Exactly, people cannot increase their spending because they already are into debts so now the "solution" is to for the government to borrow money and give it to the people.

And the former head of the Princeton Economics Department, aka helicoper Ben, thinks it is a good idea.

Lunacy!

FRED
01-18-08, 03:15 PM
You probably don't get too many re-posts from "The Distant Ocean" blog here... but I liked this one (http://www.distantocean.com/2008/01/we-must-avert-t.html)for the power of its simplicity..

We must avert this crisis of responsibility

Serious people are discussing a gathering storm (http://abcnews.go.com/Business/MarketTalk/story?id=4148651&page=1):

The Federal Reserve chairman was on Capitol Hill this morning, testifying at the House Budget Committee about the economic outlook and efforts to structure a program to get consumers and businesses spending again.
One of the most important focuses of Ben Bernanke's testimony and the issue took on the lion's share of the question-and-answer period was about what Congress should do to push the country away from recession. ...
The Fed chairman said if Congress wants to act, it should do so quickly and focus the effort on getting consumers and businesses to increase spending in the next year.
So to clarify what's going on here: after an orgy of profligacy that led to the first negative savings rate (http://www.bea.gov/bea/newsrelarchive/2007/pi1206.htm) since the Great Depression, people (aka "consumers") in the US are spending less. Assuming they're making about the same amount of money, this would appear to indicate that they're either paying off their existing debts or saving money.
Now, to any sane person this would seem like a good thing. But in a well-functioning corporate/state-capitalist system, this responsible, prudent, rational behavior is a serious crisis that must be averted.
That's a lesson worth thinking about.



...[necron99 comment]... of course, things are more complicated than that. But maybe not much more complicated than that. I often find that when the first defense against an unwelcome point of view is to throw up GDP growth charts and obscure 19th-century economic theorists, well, the unwelcome point of view is often closer to the truth... So, can anyone gainsay this without resorting to grad-school Economics material?

See Recession without Romance (http://www.itulip.com/forums/showthread.php?p=20511).