Default Is Best Way to Fix the Economy

[opebo]

WSJ Commentary: Clearing away the debt is the only way forward

You want to fix this economic crisis? You want to put people back to work? You want to light a fire under the economy?

There's a way to do it. Fast. And relatively simple.

But you're not going to like it. You're not going to like it at all.

Default. A national Chapter 11 bankruptcy.

The fastest way to fix this mess is to see tens of millions of homeowners default on their mortgages and other debts, and millions more file for bankruptcy.

Finally, someone is talking sense - just cancel all these debts and start over.  They're not 'real' anyway.  The money can just be re-created by fiat and we get back to square one (say about 2006) again.

[Beet]

"Finally"? Lots of people have been saying this since the beginning. Of course, the point would be to reach the opposite of 2006, not return to 2006. Still, I remain skeptical of this plan, because even if it did work, I'm not convinced it would be better than the status quo.

[opebo]

"Finally"? Lots of people have been saying this since the beginning. Of course, the point would be to reach the opposite of 2006, not return to 2006. Still, I remain skeptical of this plan, because even if it did work, I'm not convinced it would be better than the status quo.

Oh come on.  These debts will never be repaid unless it is through reflation anyway.  We might as well recognize this. 

It is true the date we really need to return to is about 1969 or 1972, and yes, this would require massive redistribution and other improvements in State policy, but even erasing the debt would be a step in the right direction.

[Politico]

"Finally"? Lots of people have been saying this since the beginning. Of course, the point would be to reach the opposite of 2006, not return to 2006. Still, I remain skeptical of this plan, because even if it did work, I'm not convinced it would be better than the status quo.

Oh come on.  These debts will never be repaid unless it is through reflation anyway.  We might as well recognize this. 

It is true the date we really need to return to is about 1969 or 1972, and yes, this would require massive redistribution and other improvements in State policy, but even erasing the debt would be a step in the right direction.

Yeah, the wonderful era of black and white TVs that managed to display NBC, CBS, ABC and PBS. Let's return to those days.

[Person Man]

I guess that's better than 1927...

[opebo]

Yeah, the wonderful era of black and white TVs that managed to display NBC, CBS, ABC and PBS. Let's return to those days.

Christ man, what's with mentioning the insignificant details?  Who the hell cares about the television?  Have you no life?

[republicanism]

Yeah, the wonderful era of black and white TVs that managed to display NBC, CBS, ABC and PBS. Let's return to those days.

Would your quality of life be significantly lower because of black/white tv and a less network channels?

[republicanism]

In general, I think "cancel all these debts and start over" would probably work for the US, simply because you are such a mayor player in world economy that the other players just had to accept it and couldn't do anything about it.

It is definitely not an option for the smaller players like Greece, though. They wouldn't get any credits anymore after their default.

[opebo]

It is definitely not an option for the smaller players like Greece, though. They wouldn't get any credits anymore after their default.

The Greek debt should simply be paid off by poof-money from the ECB. 

Its just air, guys.

[republicanism]

It is definitely not an option for the smaller players like Greece, though. They wouldn't get any credits anymore after their default.

The Greek debt should simply be paid off by poof-money from the ECB. 

Its just air, guys.

Yeah I agree with you that the profiteers of the Euro (i.e. Germany and a few others) should write of the Greeks debts. But they won't. Greek destiny is in foreign hands.

I was just saying that if Greece tried to handle this on their own, default would not be an option for them.

[opebo]

Yeah I agree with you that the profiteers of the Euro (i.e. Germany and a few others) should write of the Greeks debts. But they won't. Greek destiny is in foreign hands.

I was just saying that if Greece tried to handle this on their own, default would not be an option for them.

Well keep in mind what we're talking about in the above thread is not a sovereign default of the US debt but a recommendation that all private debtors be allowed to default - such as mortgages, student loans, whatnot. There is no need for a US sovereign default as the US can simply print the money to pay it off (and should).

As for Greece the problem they have is they cannot print Euros.  Bad system.  Perhaps they could counterfeit them - in point of fact really good counterfeits could save the world.

[© tweed]

Yeah I agree with you that the profiteers of the Euro (i.e. Germany and a few others) should write of the Greeks debts. But they won't. Greek destiny is in foreign hands.

I was just saying that if Greece tried to handle this on their own, default would not be an option for them.

Well keep in mind what we're talking about in the above thread is not a sovereign default of the US debt but a recommendation that all private debtors be allowed to default - such as mortgages, student loans, whatnot. There is no need for a US sovereign default as the US can simply print the money to pay it off (and should).

As for Greece the problem they have is they cannot print Euros.  Bad system.  Perhaps they could counterfeit them - in point of fact really good counterfeits could save the world.

I'm beginning to think you would have a strength in blog format.  comment on a major news issue of the day by citing an article, criticizing it and putting forth your own solution.

[opebo]

I'm beginning to think you would have a strength in blog format.  comment on a major news issue of the day by citing an article, criticizing it and putting forth your own solution.

I don't see much difference between that and participation here.  I have never looked at a blog.

[Politico]

Yeah, the wonderful era of black and white TVs that managed to display NBC, CBS, ABC and PBS. Let's return to those days.

Would your quality of life be significantly lower because of black/white tv and a less network channels?

No, because I do not watch TV. But my life would be drastically less productive and enjoyable if we returned to 1969-1972 technology. The progress of the last forty years has brought us many wonderful products, and I believe today is better than 1969-1972 as a result.

My point was this: If you really believe 1969-1972 is the "Golden Era," what the hell are you doing on your computer right now?

[Politico]

It is definitely not an option for the smaller players like Greece, though. They wouldn't get any credits anymore after their default.

The Greek debt should simply be paid off by poof-money from the ECB.  

Its just air, guys.

Why should Germany endure any inflation because of Greece's recklessness? Why should responsible holders of Euros see their net worth take a hit because of irresponsible people in Greece? Kick Greece out of the euro zone, and then they are more than welcome to pursue Zimbabwe-style policies.

As for private debtors in the US, in most cases people are able to declare bankruptcy if they feel inclined or are forced to do so. In most cases, people made their bed, so they can sleep in it. One thing that is not even realistic is thinking these people can default and get access to credit immediately thereafter.

[opebo]

Why should Germany endure any inflation because of Greece's recklessness? Why should responsible holders of Euros see their net worth take a hit because of irresponsible people in Greece? Kick Greece out of the euro zone, and then they are more than welcome to pursue Zimbabwe-style policies.

As for private debtors in the US, in most cases people are able to declare bankruptcy if they feel inclined or are forced to do so. In most cases, people made their bed, so they can sleep in it. One thing that is not even realistic is thinking these people can default and get access to credit immediately thereafter.

You are totally blinded by your moralizing priggery, Politico.  Not only are these people not 'to blame' for their debts and misfortunes (these being caused by the capitalist system), you are only hurting yourself by trying to 'punish' them. 

You need to abandon this idea of 'individual responsibility' and realize that it is your capitalist system which is unworkable, and the policies of the rich and powerful which are to blame, not some 'action' by some powerless nobodies.

[Politico]

Why should Germany endure any inflation because of Greece's recklessness? Why should responsible holders of Euros see their net worth take a hit because of irresponsible people in Greece? Kick Greece out of the euro zone, and then they are more than welcome to pursue Zimbabwe-style policies.

As for private debtors in the US, in most cases people are able to declare bankruptcy if they feel inclined or are forced to do so. In most cases, people made their bed, so they can sleep in it. One thing that is not even realistic is thinking these people can default and get access to credit immediately thereafter.

You are totally blinded by your moralizing priggery, Politico.  Not only are these people not 'to blame' for their debts and misfortunes (these being caused by the capitalist system), you are only hurting yourself by trying to 'punish' them. 

You need to abandon this idea of 'individual responsibility' and realize that it is your capitalist system which is unworkable, and the policies of the rich and powerful which are to blame, not some 'action' by some powerless nobodies.

You can be taken seriously after you actually complete a university-level course in macroeconomics and microeconomics. I am beginning to suspect you are not even old enough to have completed your high school education yet.

[opebo]

You can be taken seriously after you actually complete a university-level course in macroeconomics and microeconomics. I am beginning to suspect you are not even old enough to have completed your high school education yet.

Um, dude, I teach economics at a university.  (ok, only one course, and its not my focus).  And I took all the basic courses back in college. 

You really need to learn to argue your points better rather than just engaging in these lazy ad hominems Poli.

[Politico]

You can be taken seriously after you actually complete a university-level course in macroeconomics and microeconomics. I am beginning to suspect you are not even old enough to have completed your high school education yet.

Um, dude, I teach economics at a university.

Yeah, and I won both a Gold Medal in the Olympics and the Nobel Prize in Economics.

[Gustaf]

You can be taken seriously after you actually complete a university-level course in macroeconomics and microeconomics. I am beginning to suspect you are not even old enough to have completed your high school education yet.

Um, dude, I teach economics at a university.

Yeah, and I won both a Gold Medal in the Olympics and the Nobel Prize in Economics.

As the story goes it is supposedly some Thai university which doesn't know what it's doing. So it doesn't say anything about his ability, of course.

As Opebo has admitted to in the past, he doesn't actually know anything about economics. It's sometimes amusing to read his attempts in the field but it often becomes painfully pathetic.

[opebo]

As Opebo has admitted to in the past, he doesn't actually know anything about economics.

I've never admitted that.  Your misrepresentations are a lazy way to attack your betters, Gustaf.