Posted on 07/18/2016 9:02:43 AM PDT by blam
Most people are convinced that the government is a drag on the economy, that it should not be allowed to spend any more money. They believe that we’ve spent far too much as it is. Therefore, they believe we must pay for our sins and spend less. It’ll be tough for a few years, they admit. But soon we’ll be back in the laissez-faire garden of Eden.
That argument is dangerously wrong. It’s like someone taking a hot air balloon high up in the sky, then suddenly panicking because he’s too high. So he decides to turn off the hot air, and comes crashing down.
Metaphorically, we’re in that hot air balloon high in the sky. Hot air is credit. If you cut off the credit, we’re going to crash to earth in a great depression. It would be at least as bad as the 1930’s. And probably much worse.
We can’t think in terms of 19th century economics anymore. Like it or not, the government’s been largely directing the economy since 1940, roughly when World War II started. So this “artificial” economy is at least 76 years old. And since the early 1960s, we’ve seen a $63 trillion expansion of credit. That represents the largest global economic bubble in history, far exceeding what existed in the late 1920’s. If it implodes, it could truly be an extinction-level event.
If we banned the Fed tomorrow, balanced the budget, and stopped all government intervention in the economy, things would deteriorate very rapidly. Less government spending would cause a severe recession. Unemployment would go to 25%. Home prices would start to crash. All the banks would fail, destroying the savings of millions.
(snip)
(Excerpt) Read more at dailyreckoning.com ...
I’m guessing the Richard Duncan is also a global-warming alarmist.
Just a guess.
“Less government spending would cause a severe recession. “
—
These folks are idiots. Why not just have a debt of $100 trillion if government spending is so good? These idiots defy logic.
Perhaps. But only for a while.
Just another strawman argument.
Actually when WWII ended there was a massive reduction in government spending and numbers of people receiving government checks; and this led widespread prosperity.
Government directing the economy really started with Lyndon Johnson's Great Society aided later by Richard Nixon's Revenue Sharing.
ML/NJ
Without the government, we’d all just sit in front of our blank TVs until we died.
Bubble credit is vapor money.
Yes, when it is ‘cut off’ things dependent on vapor money, e.g. vapor ‘wealth’, will crash. Only real wealth will remain. Resources, food, land, water, energy, real industry that makes real things, people (and animals and machines) who do real work ... the same as it has been since the beginning of time.
Paper pushers who dabble in vapor money and vapor ‘assets’. will not do real well.
But we don’t have to ‘cut off’ anything. This bubble will burst on its own.
sounds like the child threatening to holds its breath
if it doesnt get its way....
GO AHEAD
how irresponsible to stay on the hwy that leads to a brovk wall and say... SPEED IT UP...
cause if we stop we wont get to our destination....
hot air balloon analogy... give me a break.......
THE DEBT IS GOING TO BE 23 TRILLION BY THE TIME BOZO GETS OUT OF OFFICE
half the government is USELESS
most of the government agencies are USELESS
and ABUSIVE
IF IT AINT IN THE CONSTITUTION .... IT SHOULD GO.....
we already have 25% UNEMPLOYED ...
let the useless govt employees join the party and get in the real world...
THE SOLUTION..... FAIR TRADE DEALS AND BRING JOBS BACK...
FREE ENTERPRISE IS THE O N L Y SOLUTION
GOVERNMENT IS THE PROBLEM....
especially when a libtard runs the show...
“The Daily Recokening.” Seems apt.
And it would start with a 15% rate on the 10yr and 30yr notes.
Yes, there would be a horrible debt deflation immediately, but we'd be back to functional in 3 years.
Millions would lose everything they have, states and municipalities would go BK.
Most banks would fail worldwide. Everything would simply stop for a while.
Then the green shoots would rise from the dead wood of zombieland.
“If we banned the Fed tomorrow, balanced the budget, and stopped all government intervention in the economy, things would deteriorate very rapidly.”
That’s what I want. Burn it all to the ground.
Just like the Amish, we conservatives will be fine without the bloated leviathan federal government. The liberals on the other hand will all be dead within a few months.
Burn it to the ground.
Didn't we already see this movie?
The government is crowding out the private sector
The Fed hasn't increased their Treasury ownership in 21 months.
Government crowds out the private sector.
Government becomes the majority owners of businesses.
Government runs out of other people’s money.
Then you have Venezuela.
Yep Exactly.
Lets continue the metaphor...
So instead of seeing the problem when we were 5,6 10 trillion feet of the floor we haven’t done anything about it and now we are 20 trillion feet off the ground. So the obvious solution is to keep pumping the hot air hoping we go even higher. Assuming that there is some mystical hot air delivery service at 30 trillion feet off the ground that will allow us to keep going up. What a dope.
[ Unemployment would go to 25%. ]
Talk about a day late and a dollar short.
Pop that balloon now and let God sort it out. Go back to living within our means as a nation and stop the wealth redistribution and credit fueled crony capitalism.
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