The Fear of Deflation

[ICantSpellDawg]

Yes, that is conventional wisdom and it is the likely outcome sooner or later. Sometimes you need to drain a dirty pool, clean it and fill it up again. You can't just start filling it up with muck, bacteria and debris. That is what our economy needs; a natural scaling down for a time, accompanied by growth in technological cost savings so that we have a healthy and vibrant economy. Eliminate more and more jobs until companies are on a solid foundation again and are not suffering from the dead weight of previous employment agreements. If the cost cutting is faster than the loss in income or net worth it might not be as painful for consumers. With the clean base we can grow a new economy. Pretty much chapter 11 on a national scale, the debts being pension funds and failed company/employee agreements.

Sure, Keynesian velocity and inflation is needed, but when is the FED going to increase the target rate and get the party started? It can't hurt to talk about alternatives when the value of the American worker seems to be equal to dirt. You'll get a better work ethic, a brighter mind, higher potential for growth and a better bottom line setting up shop in any developing country, following the incentives our current system gives. American is only as strong as its consumerism, without that, what is the point of investing here? We are, collectively, "the fat of the land."

[a completely inoffensive name]

Yes, that is conventional wisdom and it is the likely outcome sooner or later. Sometimes you need to drain a dirty pool, clean it and fill it up again. You can't just start filling it up with muck, bacteria and debris. That is what our economy needs; a natural scaling down for a time, accompanied by growth in technological cost savings so that we have a healthy and vibrant economy. Eliminate more and more jobs until companies are on a solid foundation again and are not suffering from the dead weight of previous employment agreements. If the cost cutting is faster than the loss in income or net worth it might not be as painful for consumers. With the clean base we can grow a new economy. Pretty much chapter 11 on a national scale, the debts being pension funds and failed company/employee agreements.

Sure, Keynesian velocity and inflation is needed, but when is the FED going to increase the target rate and get the party started? It can't hurt to talk about alternatives when the value of the American worker seems to be equal to dirt. You'll get a better work ethic, a brighter mind, higher potential for growth and a better bottom line setting up shop in any developing country, following the incentives our current system gives. American is only as strong as its consumerism, without that, what is the point of investing here? We are, collectively, "the fat of the land."

I don't get it. He is citing a well known economic phenomenon and you are dismissing it completely and instead advocating that we treat the economy like a pool "drain it and filler up again". Why should I be trusting what you are saying?

[Ironside]

Eliminate more and more jobs until companies are on a solid foundation again and are not suffering from the dead weight of previous employment agreements. If the cost cutting is faster than the loss in income or net worth it might not be as painful for consumers. With the clean base we can grow a new economy. Pretty much chapter 11 on a national scale, the debts being pension funds and failed company/employee agreements.

Sure, Keynesian velocity and inflation is needed, but when is the FED going to increase the target rate and get the party started? It can't hurt to talk about alternatives when the value of the American worker seems to be equal to dirt. You'll get a better work ethic, a brighter mind, higher potential for growth and a better bottom line setting up shop in any developing country, following the incentives our current system gives. American is only as strong as its consumerism, without that, what is the point of investing here? We are, collectively, "the fat of the land."

...So after cutting down employment and worker salaries, exactly who is going to buy that new goods of yours?`

And is this new economy you speak of based on an industrial base and not services? If it is, good luck with that.

[edyzmedieval]

Yes, that is conventional wisdom and it is the likely outcome sooner or later. Sometimes you need to drain a dirty pool, clean it and fill it up again. You can't just start filling it up with muck, bacteria and debris. That is what our economy needs; a natural scaling down for a time, accompanied by growth in technological cost savings so that we have a healthy and vibrant economy. Eliminate more and more jobs until companies are on a solid foundation again and are not suffering from the dead weight of previous employment agreements. If the cost cutting is faster than the loss in income or net worth it might not be as painful for consumers. With the clean base we can grow a new economy. Pretty much chapter 11 on a national scale, the debts being pension funds and failed company/employee agreements.

Sure, Keynesian velocity and inflation is needed, but when is the FED going to increase the target rate and get the party started? It can't hurt to talk about alternatives when the value of the American worker seems to be equal to dirt. You'll get a better work ethic, a brighter mind, higher potential for growth and a better bottom line setting up shop in any developing country, following the incentives our current system gives. American is only as strong as its consumerism, without that, what is the point of investing here? We are, collectively, "the fat of the land."

You are more or less advocating for the dumping of all useless jobs and make companies live off only with the people they really need and take it off from there. Well, let's say 50% people leave. In the next 3 months another 10% are added, so its 40% unemployment. Companies are perfect right now, with huge profits.
But there's one problem - what do you do with the 40%? Back in the Middle Ages, you would either kill them or starve them. Or even better, the Plague.

The thing is, the Plague was the single best disease ever done to humanity and it was the horrible impact that led to the Renaissance. Fewer people, more food, more money to them. Back then, there was no medicine. But now there is - and today killing people doesn't go well.

So what are you left with? Try and manage the economy as much as you can so it can come to 3-4% unemployment. Right now you can't just clear the pool without having a communist revolution or a downright civil war. And in the end, who is going to buy all of the goods and services that the companies produce once there is no money available for more than 40% of the population?

Your idea doesn't stand, economics is a complex social science and you need to balance. Going to the extremes will only destabilise the system and bring it to collapse.

[a completely inoffensive name]

You are more or less advocating for the dumping of all useless jobs and make companies live off only with the people they really need and take it off from there. Well, let's say 50% people leave. In the next 3 months another 10% are added, so its 40% unemployment. Companies are perfect right now, with huge profits.
But there's one problem - what do you do with the 40%? Back in the Middle Ages, you would either kill them or starve them. Or even better, the Plague.

The thing is, the Plague was the single best disease ever done to humanity and it was the horrible impact that led to the Renaissance. Fewer people, more food, more money to them. Back then, there was no medicine. But now there is - and today killing people doesn't go well.

So what are you left with? Try and manage the economy as much as you can so it can come to 3-4% unemployment. Right now you can't just clear the pool without having a communist revolution or a downright civil war. And in the end, who is going to buy all of the goods and services that the companies produce once there is no money available for more than 40% of the population?

Your idea doesn't stand, economics is a complex social science and you need to balance. Going to the extremes will only destabilise the system and bring it to collapse.

I love this guy.