The Postcatastrophe Economy Debt Cut Stimulus Plan

[FRED]

Get the word out. Embed this slide show on your site.

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[metalman]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

sweet... mega post it on his site?

[c1ue]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

There is a typo on the first page (2nd slide) of the presentation: triilion

No objections to the pragmatic solution posed - though I will admit I am more than a little peeved that I and my fellow savers will not get any benefit from the proposed partial jubilee.

It would also be helpful if a list of those candidates supporting the Postcatastrophe Economy Debt Cut Stimulus Plan could be made available.

[jk]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

It would also be helpful if a list of those candidates supporting the Postcatastrophe Economy Debt Cut Stimulus Plan could be made available.

is there a single one?

[we_are_toast]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

Looks like somebody got some new graphics tools. Very nice!

Obviously cutting $1 trillion from mortgages would lead to a banking crises, could be a big hit on municipalities, schools, pensions, and others that hold MBS', and probably would trigger $trillions of CDS pay outs. Sounds kind of like a bigger replay of what we just went through. I don't think the mortgage holders should be allowed to get off without any pain, and since this would crash and burn a lot of non bank innocent players, how about a 30 year 2% income surtax on anyone who signs up for the mortgage relief or defaults on a mortgage? The money to go to the inevitable bailouts of those who got suckered into buying all those mortgage equities.

[chr5648]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

So lets say society elects politicians and we decide to have this hypothetical Debt Cut Stimulus Plan. So now consumers have $1 trillion. What the hell are they going to use it on?

IMO they'll probably waste it on some new speculative bubble, trying to play the housing bubble again?, stocks?, energy? ipoops? 3d tvs?

I'll post a quote from marc faber

He concluded his June 2008 newsletter with the following mock quote:

"The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy. The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I've been doing my part."[19]

The kind of solutions proposed by EJ from the teci to the debt cut require a rational thinking society. Everywhere I look, all I see is irrationality, obviously its from my perspective and point of view.

I have a hard time seeing anything of substance proposed by those in power or desired by those who vote.

[LargoWinch]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

is there a single one?

Ron Paul?

[LargoWinch]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

Say FRED, how can you get this full screen?

[jk]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

Ron Paul?

you think he'd support abrogating all those contracts?

[Rajiv]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

you think he'd support abrogating all those contracts?

Kucinich well might - since he did have Michael Hudson as his chief economic advisor

[we_are_toast]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

is there a single one?

I would guess about 70% of democrats would support it, 5% Republicans.

April 30 (Bloomberg) -- The U.S. Senate rejected a measure that would let bankruptcy judges cut mortgage terms to help borrowers avoid foreclosure, a victory for banks and credit unions that said the legislation would increase loan costs.

The proposed “cram-down” amendment to a housing bill was defeated today in a 51-45 vote, with 12 Democrats among the 51 opponents. The measure needed 60 votes to pass over Republican objections. The House passed its version 234-191 on March 5.
...

http://www.bloomberg.com/apps/news?p...d=aZgoZUJbGqpQ

[FRED]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

I would guess about 70% of democrats would support it, 5% Republicans.


http://www.bloomberg.com/apps/news?p...d=aZgoZUJbGqpQ

Great example of bank lobby influence on legislation to prevent a bubble debt write-off. Added to the slide show.

[FRED]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

Say FRED, how can you get this full screen?

Changed a setting so now you can get a full sized image by clicking on it. Give it a try!

[ViC78]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

Ron Paul?

http://www.ronpaul.com/2010-05-25/ro...expansion-act/

Congressman Ron Paul today introduced legislation to permanently extend the first-time homebuyer tax credit and to make the credit available to people whose homes have been destroyed by a natural disaster, such as a hurricane.

Renewing the first-time home buyer’s credit will help Americans purchase a first home with their own money, instead of having to rely on government-funded or backed programs.

LOL, he thinks that the tax credit is not government funded and is not aware that it is the most inefficient way to keep housing prices elevated. A jobs program would be the best bet if you want to stabilize housing prices.

[vinoveri]

Re: The Postcatastrophe Economy Debt Cut Stimulus Plan

I have been in favor all along (since the crisis started) to let the creditors take their haircuts as they were the ones who took the risks and should bear the burdens. Let the rule of law work its course. But the answer given (and I recall supported here) is that we can't do that b/c the system would implode and we would all be worse off. Well if that were true (and I don't doubt that it was in large meaasure true), then the system itself was evidently untenable, and either unsustainable per se or corrupted to the point of nearing collapse - in either case needing true structural reform. Where is the reform in your plan?

Now, 2 years after the looting and direct transfer of wealth has been going on in full force (bank bail-outs, 0% interest rates etc) this suggestion to write down some of the debts that represent fictitious value. Where is the reform? Where is the end of moral hazard? Forgive the debt of those most levered, debt incurred resulting in windfall benefits to the seller of the inflated asset, after the public ledger has been loaded down, after the looters have absconded and secured themselves?

I ask again, where's the reform? Where are the prosecutions and the jail sentences? Where are the structural changes to the system? Where are the end to asset bubbles?

With this solution, while it might in fact accomplish some near term benefits, it will just encourage the same sort of behavior (do you remember immigration reform of 1986? where are we with that 24 years later?) Hey debt jubliees for the most risk inclined folks who get caught in a downturn every generation or so .... no worries, go speculate, join any bubble, this is america, everyone can get rich in nominal dollars if they time it right, asset bubbles are good, etc. This is not anywhere near the conditions or intent of the biblical proscription for debt jubilees.

A culture built on greed and envy cannot endure. The good thing about the U.S. is that although greed and envy is being thrown at us 24/7 and is slwoly infecting our broader culture and has obvioussly deeped infected the world of politics and finance (DC and Wall Street), we have a lot of cultural capital that has been built up over centuries (ingunuity, hard work, fairness, charity, and downright affability) that continues to sustain the culture. Until our economic system encourages and rewards those who create rather than those who merely trade, we're not going to recover IMO.