It leaves us with this: We are in this for the full ride to the bottom. Only when there is no other choice will austerity happen. And I am not just talking about the US.
I think we are headed for the worst time in the history of mankind. . . .
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You may be right, that is why I tell everyone to stock up on food and precious metals, you know, like gold, silver, lead and brass.
Bad times seem very likely around the corner but, unlike you I do not believe that it has to be that way. My prescription is is full employment and high inflation for several years. The only way to pay down the debt is through inflation, thus reducing the real debt. Even with high inflation we will need to curtail our give a way economy. If people are working our dollar will remain the reserve currency, if we develop our own energy the oil prices will be cut in half or better. If we cut corporate tax to a maximum if 10-15% companies all over the world will want to locate here. The only reason we don’t have manufacturing here is the taxes, not the high cost of labor. Our labor costs are not high when you factor in their productivity because of education.
With low corporate tax rates the economy will grow dramatically and tax revenues will skyrocket, even with the reduced rates.
Right now only 60% of people who could work are. Think if the work force were increased by 2/3’rds. I know my numbers don’t sound realistic but they are. Right now 40 out of 100 people are not working that could and would if they had a job. If we put those 40 people to work it would represent a 66% increase in the work force, a 66% increase in tax revenues, and a comensurate decrease in welfare and unemployment pay.
Pouring extra money into the economy will send inflation through the roof because of the money that banks are holding but can’t use. That inflation will hurt seniors, me, but it is the only way out that is peacefull.
I think it possible, but unlikely that we will take my way out of the mess the Democrats have put us into and Obama is purposely running us into. Possible, but it will be difficult. It will be difficult to get Democrats to agree to low corporate taxes, difficult to get Democrats to let us use our own oil, as in drill baby drill and most difficult to cut government handouts so that people will have an incentive to go out and work.
Inflation is an invisible tax.
I think all of the things you mentioned are sound. The problem is that I think all solutions have limitations. I think your solutions, implemented back around 2003 may have had a chance. I now think the problem is WAY too big, by several orders of magnitude, for any such solution.
The economic expansion necessary to resolve this mess is as unlikely as a janitor saying, “If I could just find a job that pays $4 million a year, I could get my debt under control in a decade or so.
Yes, I believe it’s that hopeless, regarding a human solution. The janitor is losing his home and possessions, and probably his wife. And the neighborhood he’s moving to is very dangerous.