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KoKo

(84,711 posts)
Tue Mar 26, 2013, 10:56 AM Mar 2013

Government Debt and Deficits Are Not the Problem - Private Debt Is

Plainspoken Ecnomics Professor Michael Hudson explains the difference. A good watch!

Michael Hudson: Why do they call for governments to balance the budget by pushing the economy at large deeper into debt, while trying to save the banks from taking a loss? -


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Government Debt and Deficits Are Not the Problem - Private Debt Is (Original Post) KoKo Mar 2013 OP
Financial Clarity! smile777 Mar 2013 #1
The main point of what Hudson is saying about public versus private debt. AdHocSolver Mar 2013 #2
Nice summary of that...thanks. For those who can't watch the video KoKo Mar 2013 #3
Hudson is very good at Explaining Economics about What was Done to US! KoKo Mar 2013 #4

smile777

(8 posts)
1. Financial Clarity!
Tue Mar 26, 2013, 11:22 AM
Mar 2013

This is an excellent discussion re debt which really illuminates the whole situation in a way I haven't seen presented before. Mr. Hudson really pulls off the veil so we finally understand what the banksters and their backers in congress are up to.

AdHocSolver

(2,561 posts)
2. The main point of what Hudson is saying about public versus private debt.
Tue Mar 26, 2013, 02:37 PM
Mar 2013

Incurring debt is only a problem if the debt cannot be repaid.

The practice of the U.S. government of "printing" unlimited amounts of money ensures that the "debt" will eventually be repaid.

The absurdly low interest rates maintained by the Federal Reserve boosted stock prices and real estate prices, by encouraging people to spend more on housing than they could in reality afford to repay, and investing more in the stock market than they could afford to lose.

The Fed policy of artificially low interest rates was designed to boost demand for stocks and real estate to benefit the Banks and Wall Street. The result was huge capital gains for Wall Street and a lot of profits for banks and real estate firms.

The inevitable results were a stock market bubble and a housing bubble that led to an inevitable crash.

A "normal adjustment" would be a drop in stock prices and a drop in housing prices, a so-called market adjustment, in which both borrowers and lenders would lose.

What the government did by means of the bank bailouts was to cover the losses of Wall Street and the banks which had essentially pulled off a Ponzi scheme (with the help of the Federal Reserve).

The home buyers and investors who got in over their heads lost heavily. The banks and Wall Street not only had their losses covered, but by continuing to maintain artificially low interest rates, are pulling in more investors, and this increased demand is driving stock prices and real estate prices back up.

In other words, by bailing out Wall Street and the banks, and at the same time, pushing so-called austerity measures, the government is aiding and abetting a new Ponzi scheme, and inflicting damage on the real economy (the economy of goods and services and jobs).

KoKo

(84,711 posts)
4. Hudson is very good at Explaining Economics about What was Done to US!
Tue Mar 26, 2013, 07:16 PM
Mar 2013

that I think it's worth the watch for those who can download...who maybe don't have interest in economics and what's going on there...he makes it plain and easy to understand for many of us who aren't into Wall Street but KNOW that WE GOT SCREWED!

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