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As Household Debt Hits $14 Trillion, Economists Say Fed Quantitative Easing Solution for Next Recession Insufficient

Originally published at http://www.commondreams.org/news/2020/02/13/household-debt-hits-14-trillion-economists-say-fed-quantitative-easing-solution-next

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14 trillion household
10 Trillion corporate debt
23.3 trillion USA debt
state and local debt
much is long term.
But a panic can occur.

We seem to be in a cycle of Republicans crashing the economy while extracting money for the rich while the Democrats prop up the economy while extracting money for the rich. What is that definition of insanity and about expecting different results?

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Debt is just another word, for nothing left to lose.

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When faith in the empire crumbles, all that debt will come due.

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Oh, who are we kidding? On that fateful day we will simply double down, push everything on the line and roll those bones one more time. And when we crap out, we will make a run for the door, and as we are being tackled by the pit boss and and a large Chinese bouncer, we’ll do what we always do. Blame it on someone else, and ask for more credit.
We are, after all, Americans

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Richard Wolff was on Thom Hartmanns show today basically stating the same warnings. He said that there is a bubble. And it’s a big one. It may be THE big one.

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The definition is called the history of civilization. Once it was the kings and nobles and that age old game of stomp the peasants but we no longer call ourselves peasants. Nevertheless we pay the taxes that the wealthy do not and we pay off the debt that gave the rich tax cuts on what little they do pay in taxes.

The only conspiracy theory that I believe in is that of greed. If you are rich and see that you can make money if you do a deal with other rich people that will make them money too, all the rich people will work together to see it happen. Call it the ‘automatic cabal’ economics theory.

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Capitalism can’t survive without high levels of debt.

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If credit cards were suddenly declared illegal, the U.S. (and most western nations) would fall to third world status. To quote Billy, there’s no there there. Which begs the question, why doesn’t a third world country hand out credit cards to rocket into the ‘1’ slot? International currency rules? Yes. but don’t forget how crucial most of the world’s trade and value pivot on keeping that currency in dollars, U.S. dollars. Apply some truth serum to those deep state types and they’ll tell you protecting the dollar supremacy is the real reason for our enormous military. Challenge that and end up like Saddam cowering in a rat hole. The commie crap is just a ruse.

There is one sector that loves the huge deficits and debt we’ve incurred - bond buyers. We tend to think that wealthy countries, investment houses and banks hold those cards with generous payoffs. But it’s also very wealthy individuals who can afford to purchase the high ticket bonds. Unlike the rest of us, it’s one of the ways extreme wealth avoids the worst of recessions.

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If there is another recession/depression we need a bottom up solution - let’s bailout people and families first by giving them the money and let the money trickle up.

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yeah, this debt is an unscalable mountain.

and a testament to just how rotten this farce of a nation-state has become.

wait until all those deferments that have been piling up interest come due. Ouch!

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Republicans especially but also centrist, corporate Dems only piss and moan about government debt. They ignore consumer debt. Seventy five percent of the economy is consumer spending. If the borrowing slows down or peaks there goes the economy.
This is also seen in student loan debt. Highly indebted students can’t afford to consider buying a house or the banks won’t touch them. This is a huge drain on family plans, careers and hopes and ultimately the economy.
It is quite like drugs what happens when the fix runs out-the Joneses man the Joneses

The debt issue will be solved by the oldest of methods - inflation. How did Rome pay off its debts? How did the old USSR pay off its debts? Currency debasement and inflation. Par of the big push for government-run digital currencies is the ease with which billion$ can be created. The private digital currencies (Bitcoin, et. al.) are delusional - no government will EVER give up the right to create money.

Americans are addicted to consumerism. It’s their main drug.
They can’t afford it, so they borrow the money.
The American government is addicted to militarism and plutocracy.
They’re printing money and borrowing it to fund their priorities.
The president used bankruptcy as a business model.
That’s the USA.
Insanity.

AOC and Bernie both have proposed limiting credit card interest rates to 15%. Personally I think it ought to be a rate tied to whatever the official inflation rate is - maybe inflation + 10%? Interest rates were limited for hundreds of years to help prevent the kind of disaster we are seeing now. Perhaps they had it right.

Very well put and informed and enlightening piece indeed.
Thank you!

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The worst part is that the GOP and Co. use that as an excuse to cut social spending and entitlements instead of raise taxes on the wealthy and cut military spending. “Glacier worm” is right about the elites propping up the dollar using a strong US military presence globally to ensure trouble makers don’t get out of line.

What a shame that there isn’t new money to exploit, only the present and old money.

Without Public debt (government spending) there can be no Private surplus (excess currency to provide among other things Private production and profits) When you reduce Public debt, you reduce Private surplus. If you completely cancel out Public debt, you virtually stalemate the Private economy. Public surpluses, actually suck capital out of Private reserves.

Advocating for Public surpluses is advocating for a completely government owned economy that has no room for Private economic enterprise or development.

You seem to be conflating personal consumer debt, personal credit debt, private group debt, local and state public debts, and national Public debt, which are all very different types and measures of debt, many of which actually are mutually offsetting, or in several cases are multipley counted while you seem to be just adding them together as though the are all the same type of thing that should be independently added cumulatively.