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View Diary: Insolvency, tax cuts, military spending and social security (188 comments)

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  •  They imploded because of the gold standard (9+ / 0-)

    and a crazy monetary policy.

    Q: when did Germany return to growth?

    When Hitler reneged on Germany's debts and started a massive stimulus policy of building in the 1930s. You should look at the rip-roaring 1930s (especially late 1930s) in Germany when they were printing money left and right and had a great economy.

    If Hitler hadn't been an evil monster, he'd be thought of as the FDR of Europe for his Keynesian policies.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Tue Apr 24, 2012 at 10:00:24 AM PDT

    [ Parent ]

    •  Foreign-denominated debt was the killer (1+ / 0-)
      Recommended by:
      upstate NY

      More precisely, they imploded because the debts were denominated in gold or foreign currency. Such a debt can go to infinity measured in domestic currency. Germany had no alternative.

      Responding to Sparhawk - of course "foreign investors ... What they want is stuff."  is true But the point is that the foreign investors have no legal claim for "stuff" if they hold a fiat debt. MMT economists support a JG which would put an economy on a labor standard - in effect making the foreign investors have the right to be provided with the produce of quantities of unskilled labor in the domestic economy.

      In normal situations, this is the perfect anti-inflationary way to balance creditor & debtor rights. MMT policies would be very deflationary in the USA - see my reply to Sparhawk in another thread.

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