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View Diary: GOP pledge reduces deficit less than Obama's budget (92 comments)

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  •  what kind of currency crisis? (5+ / 0-)

    Our debt is denominated in US dollars. The worst negative consequence would be higher interest rates. And inflation, but that would reduce the total debt.

    There is way too much hysteria about debt, probably because it can feed the BIG GOVERNMENT narrative

    "The beatings will continue until morale improves" - a foolproof election strategy

    by bay of arizona on Fri Oct 01, 2010 at 06:41:33 AM PDT

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    •  That's exactly the problem, inflation! (0+ / 0-)

      You are right, we wont' default but we'll have to inflate away the debt.  The problem will be inflation won't be equal and across the board.  Wages WON'T keep up with inflation with unemployment at 10% and with inflation rates of 20%, the poor and people on fixed incomes will end up eating cat food and living on the streets.  This assures America will be a 3rd world country.

      •  That makes a lot of assumptions (0+ / 0-)

        that are possible but not certainties...some of that depends on how things go in the rest of the world....funadmentally, though, inflation wouldn't happen simply because there are more dollars, there would also have to be more dollars in circulation...if running deficits alone were enough to fuel inflation, it would be happening now, but it isn't.

        My problem with that chart is that the blue and red lines don't actually diverge that much...and Obama's promise not to raise taxes on anyone making over $200K/$250K raises the deficit a great deal. I think a real plan to reduce the deficit without hurting the recovery would be to retain the lowest bracket, keep the increased deduction for married couples, phase out the increased child tax credit (let it go down to $750, then $500) for families making more than $60,000 or so....also, all increases should be phased in over a couple of years, and there should be new higher brackets created for those with multi-million dollar annual income.

        "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

        by Alice in Florida on Fri Oct 01, 2010 at 07:13:11 AM PDT

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        •  When the FED buys TBills, it will circulate (0+ / 0-)

          If the FED buys Tbills, that's newly printed money that will go to the government and get circulated.  There simply is not enough money out their to support the deficits in the charts, the FED will have to step in.

          The better way is to restructure to a green economy and increase taxes like you've suggested.

      •  Um (0+ / 0-)

        the few serious economists out their are worried about Deflation. "Inflation worries" is FED code for "screw over the working class we want more!"

        And btw "peak oil" is a friggin laughable myth based on nothing.

        And Jesus said to his disciples, "Truly, I say to you, it will be hard for a rich man to enter the kingdom of heaven.

        by cdreid on Fri Oct 01, 2010 at 08:36:27 AM PDT

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        •  Ummm, even Krugman sees it coming (0+ / 0-)

          Krugman talks of disinflation, then inflation, which is the right approach.  As long as we have a FED, there will be NO prolonged 1930's style deflation.  The FED will always step in.  Gold wouldn't be where it's at if the rich money was concerned about deflation.

    •  You, apparently did not live through late 70's (0+ / 0-)

      and early 80's inflationary years.  It is devastating on all economic classes but the very wealthy.

      Think about your bills each month and ask yourself if you could afford for them to be 50% higher in 2-3 years.. with some commodities jumping much higher.. and gas prices tripling.

      "Those are my principles, and if you don't like them... well, I have others." - G. Marx

      by Skeptical Bastard on Fri Oct 01, 2010 at 07:23:02 AM PDT

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      •  Look at the price of Gold and commodities. (0+ / 0-)

        The very rich are already trying to protect themselves from the coming wave of inflation.  Most people can't buy Precious Metals, or copper stocks, or physical commodities to protect from inflation, we have to eat and pay rent.

        High inflation, especially now, will crush the poorest and the middle class living paycheck to paycheck.

    •  Money is like the alphabet, a tool to (0+ / 0-)

      facilitate transactions.  Since it is a figment of the imagination, there's no reason for it to be scarce, other than that some people have become addicted and are hoarding it.
      Either the hoarders' grip has to be loosed, or we have to keep printing more.

      Since the hoarders' behavior is disruptive, like a temper-tantrum prone toddler, their hoarding needs to be addressed.  

      The Constitution is not a menu for an exclusive diner.

      by hannah on Fri Oct 01, 2010 at 07:28:27 AM PDT

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