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Debt deflation is the problem for the financial markets; inflation is the penalty for us proles.

I second your "Second New Deal" idea, though I prefer Chris' revolution.

Related remark - John Williams (shadowstats) predicted this past year's performance in December, 2006. I wrote to him the other day, trying to gauge any interest in co-ops or re-regulation. He's a sort-of libertarian, but he said that such approaches sound interesting to him now - except that it's too late. Stagflation = death this time - no way out.

Robert Reich has been preaching higher taxes on the rich and earned-income-credit for the poor lately. Sounds OK to me, too.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Wed Mar 5th, 2008 at 04:34:12 PM EST
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Well, the problem with debt deflation is that it kills credit and this kills the "real" economy. So it is "our" problem, too, even if indirectly.

I don't see why there would have to be no way out of stagflation this time around.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Wed Mar 5th, 2008 at 04:43:39 PM EST
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My point was not comprehensive; it was just looking at the immediate relationships. It's almost always "us" that face the problems ultimately.

As to John Williams' comment, I was just musing. Actually, I was amused that he would entertain the idea of co-ops or regulation, given his basic philosophy. Then he was sort-of emphatic that we were submerged in quick-shit. No, I don't agree with him about the future - just the present.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Wed Mar 5th, 2008 at 07:20:49 PM EST
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