From Rick Ackerman:
We all need to get on board with paying down debt like any responsible citizen debtor would do. We owe big-time and this is but a taste of how it may cost us:
- Major employment reductions amongst those working in the public service
- Health care services that are rationed. Fewer nurses, health practitioners and support staff
- Larger class sizes in schools and large reductions in the number of teaching positions
- Reduced public pensions and benefits, including social service payments
- Interest rates that will gradually rise and eventually settle at around six percent
- Strikes, labor unrest and supply chain breakdowns
- Widespread unemployment affecting virtually every sector of the economy. None will be spared
- An expansion of public works programs, green initiatives
- Civil disobedience, arrests, targeting of threatening movements by security agencies and government
- Increasing taxation, particularly on the wealthy and buoyant businesses
- Shortages of all kinds and the loss of variety on store shelves
- An erosion in standards of living for most but particularly for those who are indebted
- Cutbacks in military spending, defense, coastal patrols and overseas engagements
- Cherished programs that Government usually support being completely eliminated
- Larger police forces, prison expansions and a judiciary that is strained to the breaking point
- Cities, states and counties denied bailouts, forcing them to bankrupt
- A reduction in services that protect the environment, animal rights and special interests
- Closures of universities
I thought you might be interested in this…
http://www.huffingtonpost.com/stan-sorscher/group-think-caused-the-ma_b_604810.html
Interesting.
But “group think” IS the market…
When the group thinks individually, we have a well functioning market. When individuals succumb to group think, we get manias, bubbles and busts..
So it’s a tautology to say that group think “causes” a bust..
With our money-for-debt system, bankers create money and exchange it for a promise to repay it. Therefore, no debt = no money supply. Does that sound fair to you? Have I mentioned that the bankers create the principle for loans but not the interest thereby guaranteeing at least some defaults?
What is called for is debt forgiveness or debtor bailout not some mindless banker moral drivel about repaying debt to the government backed counterfeiting cartel. (cf Deuteronomy 15:1, Leviticus 25)
1. You’re not distinguishing between legitimate debt and illegitimate debt. Lots of people knew exactly what was going on and were playing the ponies.
2. Do you also plan to recompense people who lost in the equally manipulated stock market crash, the manipulated gold market, and the manipulated savings certificates? If not, why not?
3. Sorry. Repaying legitimate debt helps savers and anyone who wants the currency strong, as well as all the people all over the world who bought treasuries and us notes in good faith. Not just bankers. In fact, it’s the bankers who want debasement because it helps their trading desks.
4. The reason the west is in this mess is because people think it’s fine to keep the profits off their good trades, but someone else should pay for their bad trades.
5. Those who were really conned can file class action suits.
6. If these “victims” were honest, I want to know why they didn’t complain when their property values were soaring? Where’s the sympathy for the people who couldn’t buy before and can now.
7. If the bail out is declared fraudulent, the debt from that can be called fraudulent.
But debt incurred from public expenditure that was approved by legislators and voters should be paid. Walking away from that is pure theft
“Where’s the sympathy for the people who couldn’t buy before and can now.” MB4
You mean the savers, of course, who were also cheated by the banksters by suppressed interest rates. Notice how the banksters play the savers off the debtors. Please don’t fall for it.
Here’s a solution:
1. Set reserve requirements to 100% to kill the fractional reserve looting mechanism.
2. Print a sufficient amount of debt-free legal tender and distribute equally to all adults in the population. This will allow debtors to pay down their mortgages to market price levels and would also compensate savers for years of artificially suppressed interest rates. Note that the banks would be made whole in nominal terms but would suffer relatively in real terms. Serves em right.
The long term solution is to repeal legal tender laws, the capital gains tax, government deposit insurance and allow alternative currencies.
Don’t mistake me for a Brownian. I am a radical libertarian who understands Mises but will trust what Moses said instead.
“6. If these “victims” were honest, I want to know why they didn’t complain when their property values were soaring?” MB4
Because honest saving for one’s retirement was precluded by artificially suppressed interest rates?
What were they supposed to do? Wait for a deflationary depression where they have some of the few remaining dollars in circulation?
But in any case, the government backed banking cartel is at fault. Both savers and borrowers can be bailed out at the banks expense in real terms as I explained.
F. Beard is not radical libertarian and he will take over your blog.
I figured he wasn’t.
Anyone is free to comment. they don’t have to be libertarian/
“F. Beard is not radical libertarian and he will take over your blog.” a friend
No, I will make my case and eventually leave in sad disgust.
Except for advocating a just reset, I am for complete liberty in money creation and acceptance AFTERWARDS. Meanwhile, I suspect some of you are just gold-bugs in libertarian clothing. Must I point out that the central banks own huge amounts of gold? Are you advocating for them?
Supposedly you guys (Austrians, I presume?) understand the injustice of fractional reserve lending but you can’t think of a just remedy other than foreclose on people’s homes?!
I hope some of the malinvestments liquidated include your jobs if you persist in your stubbornness.
“I figured he wasn’t.
Anyone is free to comment. they don’t have to be libertarian/” mb4
Why? Because I quote Moses, a believing Hebrew, while you guys worship Mises, an agnostic Jew?
On just about any issue from peace to drugs, education, taxes or any other libertarian topic I am as libertarian as anyone here. But because I heed Moses with regard to debt forgiveness you are offended?
Foreclosures are what happens if you get in over your head. In most cases, the banks are also taking hits, the government has already handed out money, and reduced terms.
Renting is an option you know. I’ve done it…when house prices are too high.
You’re not concerned about all the people who couldn’t afford to buy houses till now, are you?
Goldbugs were advocating gold long before the banks jumped on the bandwagon.
Your inability to discuss things rationally without ad hominem is exactly in keeping with the general inability of the population to keep their end of a deal.
It’s always blame someone.
If there was fraud, by all means sue.
I suspect in a most cases there was no fraud. Merely foolishness and greed on the part of homeowners who now want special treatment.
Are you prepared to also pay car loans, student loans, dental bills, divorce payments, cosmetic surgery and anything else that folks can’t pay
And if not, why not?
In most cases, those deals were contracted no less nor more honestly than the house deals
This is what is wrong.
No one wants to pay their bills any more.
We have become moochers and looters.
Where am I offended?
Please don’t put words in my mouth.
I’m happy for anyone to comment. They don’t have to be libertarian.
You quote Moses selectively and completely out of keeping with the spirit of the Torah.
Self reliance. justice, honor are part of the libertarian and Mosaic spirit.
“You shall not escape before paying every farthing”; “every jot and tittle of the law shall be fulfilled.”
THAT is Mosaic.
“Your inability to discuss things rationally without ad hominem is exactly in keeping with the general inability of the population to keep their end of a deal.” mb4
A deal made with government backed counterfeiters in a government enforced monopoly money supply? Consider the moral implications of that if you will.
Please explain to me why an economy should go from prosperity to austerity with no material damage to the economic base? So “debt” to government backed counterfeiters can be paid?
Borrowers were driven into debt slavery by the same process that cheated savers and put the banks at risk. I propose a solution that bails out debtors, compensates savers and fixes the banks. Just what is your problem with that?
“We have become a nation of moochers and looters.” mb4
True, but remember that socialism did not get a good start in the US till after the government backed banking cartel ruined the economy in the 1920’s and 1930’s. It has done so again. And once again we have the Keynesians who want to “stimulate” the economy and the Austrians who want to liquidate the “malinvestments”. How about we listen to Moses for a change?
Hi –
You’re misunderstanding my position.
If there is actual fraud, have recourse to the law.
If necessary declare the bail outs illegal and a criminal conspiracy and seize the assets of the banks.
That’s fair enough.
But printing money as legal tender is really not illegal.
It was done for decades with everyone’s assent, when we had a boom.
Personally, i don’t see what is so terrible about walking away from your house if you can’t pay. You lose a bit of equity (not much for most people). A few thousand.
The Ackerman article was the only piece which actually made that point – we need to bite the bullet and face up to reality.
The fact that you think your position is midway between Keynesiansim and the Austrians tells me you’re socialist or interventionist at heart..
“Borrowers were driven into debt slavery by the same process that cheated savers and put the banks at risk.”
I find that funny, the part about the borrowers being driven, as if. Brainwashed, conditioned and enticed maybe, but not driven.
Yes.
I saw them being driven..by greed, for the most part.
“The fact that you think your position is midway between Keynesiansim and the Austrians tells me you’re socialist or interventionist at heart..” mb4
No dear. Both Keynesians and Austrians are wedded to the idea of lending and borrowing money at interest. The Austrians are better because they are against fractional reserve lending but they are still committed to borrowing and lending money for investment purposes which reminds me of this:
“You may charge interest to a foreigner, but to your countrymen you shall not charge interest, so that the LORD your God may bless you in all that you undertake in the land which you are about to enter to possess.” Deuteronomy 23:20
No, I am a radical libertarian not a socialist. There is, however, the little problem of justice which after all IS JUST and might be needed to prevent the Greatest Depression and WWIII.
As I thought – you want to ban the market price of money. That is medieval and anti-capitalist.
Interest represents my time preference and willingness to fore go consumption. It’s compensation for the thrift and foresight needed to save.
No interest and no one will save. Then you borrowers won’t have money to borrow.
I suppose you are also for the stoning of adulteresses, bans on shellfish, and other Biblical laws?
The New Testament says the man who does not work should not eat.
And Proverbs also says the debtor should be slave to the lender.
So let’s not drag in religion selectively to make our arguments.
Doesn’t work – unless you plan to take everything else Jesus said also literally.
“I find that funny, the part about the borrowers being driven, as if. Brainwashed, conditioned and enticed maybe, but not driven.” Clark
Yes, I suppose the borrowers could have instead parked their money in savings accounts and be permanently priced out of the housing market by negative real interest rates in housing.
“Yes.
I saw them being driven..by greed, for the most part.” mb4
Greed or not, the motivation is irrelevant. The public was driven by government backed fractional reserve lending in the government enforced monopoly money into speculative behavior. Speaking of greed, envy is just as bad and probably worst. Are the savers so willing to punish the “greedy” borrowers that they are willing to do without a bailout themselves to prevent the borrowers from getting one?
Again, both borrowers and savers can be made whole by a distribution of debt-free legal tender fiat. Furthermore, the banking system would be fixed too.
“As I thought – you want to ban the market price of money. That is medieval and anti-capitalist.” mb4
No. A true free market in money creation would show that lending at interest is obsolete, I would bet. But do as you please.
“No interest and no one will save. Then you borrowers won’t have money to borrow.” mb4
Yep, that appears to be a dilemma. It took me quite a while to resolve it or perhaps I’m deluded. Let’s have a free market and see, shall we?
“I suppose you are also for the stoning of adulteresses, bans on shellfish, and other Biblical laws?” mb4
No, as a Christian, I live under Grace. Yet, it is important to realize the graciousness of that Grace by realizing the seriousness of sin.
“Proverbs also says neither a borrower nor a lender be.” mb4
Chapter and verse, please? I believe you are mistaking a saying of Ben Franklin’s.
Here’s some Psalms:
“All day long he is gracious and lends, And his descendants are a blessing.” Psalm 37:26
“It is well with the man who is gracious and lends; He will maintain his cause in judgment.” Psalm 112:5
“Let’s not drag religion selectively to make our arguments.
Doesn’t work – unless you plan to take everything else Jesus said also literally.” mb4
The Bible is consistent from cover to cover, both Old and New Testaments. The more I read it, the more consistent I find it to be.
Like I said, I am a radical libertarian AFTER a just and probably necessary reset. If the Austrians cannot see the necessity for this then they run the risk of less principled folks seizing the moral high ground and saving the day. Then you can forget about achieving liberty in the near term.
God is not the state and vice versa
That’s your fundamental error.
“God is not the state and vice versa
That’s your fundamental error.” mb4
No, my fundamental “error” is that I take the Bible seriously with regard to economics, something I’d advise the Austrians to do.
Instead I find you in the thrall of Jews who were at best agnostic, Ayn Rand, Mises, Rothbard (my favorite, BTW), F. A. Hayak, etc.
Now. Just where do you think those agnostic Jews got their economic wisdom from?
So, logic alone dictates that it is illogical for Austrians to dismiss the Torah’s economic teachings.
I’ve had my say. Thank you. It was interesting.
I’m not in anyone’s thrall, I hope.
And if Jews think better than Gentiles, I’m quite happy to take their lead….
“And if Jews think better than Gentiles, I’m quite happy to take their lead….” mb4
Even when they can’t decide if God exists or not? The Jews are certainly chosen by God and are a brilliant race but they do have their blind spots. The purpose of the Gentiles right now is to provoke the Jews to jealousy. So while I can and do learn from Jewish writers, I am reminded that they are not the last word in wisdom these days. For that, I turn to the Torah and the New Testament.
OK, that was my last word. However brilliant and provocative your response is, I’ll not answer.
Adieu.
The Torah and the New Testament were also written by Jewish people.
Don’t you think picking writers based on their religion or ethnicity would tend to cut you off from a lot of good thinking?