And what you are advocating for is returning to the status quo that got us into this mess.

Uh, I think that would be incorrect. Both mechanisms (of current deficit increase) and context actually do matter. You seem unwontedly simple minded today, General.

The Fed could do quite a bit, really; search Matt Yglesias site, he talks about it regularly.

Listen, I am upsetting conventional wisdom by people who are a lot smarter than me on this topic. Though not certainly right, but I will defer to your alls expertise and Corner Stones following along like a loyal puppy.

It’s not CW you dumbass. It’s hard to argue that debt is cheap and it just makes sense to understand we need to borrow money to inject straight into the economy.
You can try it on, as you’ve pathetically attempted but you’ll fail as you’ve demonstrated.

Because people who have had stagnated wages for over a decade are somehow to blame. They have been profligate, spent too much, and ran this economy into a ditch.

Heh.

They (or some fraction of them) are “to blame” in one sense though: a lot of them kept voting for politicians whose policies made the situation worse (i.e., for Republicans).

I actually think it started primarily with Reagan, whose policy was essentially “seed corn is tasty, we have extra, let’s eat!” Bush 1 was more sensible, tried to scale back the ever-increasing seed-corn eating a bit; Clinton was both lucky and able, and kept production from the remaining seed-corn increasing; and Bush II went all out with the seed-corn redirection up-income/up-wealth, where it has rotted. We’re now nearly out of seed corn, and the fix will be long and slow, no matter what. So in some sense, we’re stuck with “going hungry”.

(We do, however, have to stop sending so much of it up-income/up-wealth. I say this even though I am actually closer to the top than most. In some sense, I am a class traitor … except that I have not yet made it to the top 0.1%, and both my sympathies and my sense of justice are more Warren-Buffet-esque than Larry-Ellison-esque.)

Pushing off problems until the last possible minute IS the American Spirit. This country has done it since its founding. We should change our national motto from E Pluribus Unum to: “If you wait until the last minute to do work, that means you’ll only have to work for one minute.”

But as far as anyone having any true facts in a situation we haven’t been in, in most of our lifetimes, I don’t think so. We have theories and faith, whichever remedy we come down on.

We have theories which can be substantiated by data. Deficit fears are driven largely by expectations of phenomena that are not present in the data. Those are pretty much the two key points being raised by the likes of Galbraith and Krugman. Those pushing debt fears and austerity are the ones playing with goblins and fairies.

Just expressing my thoughts on the overall problems we have here, and stick by them, wrong as they might be. time will tell. And give the pumas a scritch behind the ears for me.

Shorter Stuck – You are right and I am wrong, but stubborn.

I can’t do better than that.

The financial woes of the middle class aren’t the result of excess spending, but diminishing incomes when adjusted for inflation

Stuck doesn’t care. We should all tighten our belts a bit, and get ready for some sacrifice and tough choices.
Because people who have had stagnated wages for over a decade are somehow to blame. They have been profligate, spent too much, and ran this economy into a ditch.

I am not claiming that anything like this will, can, or even could happen.

Which was basically my original point: fear of U.S. financial insolvency is pretty baseless unless you assume that, at one point, everything goes completely off the rails first. Which basically means we’ll have bigger problems to worry about.

But we have seen higher rates (than 3 to 4 percent) in the past, when the US did not collapse. So we probably will again (without the US collapsing). So we should probably take advantage of the great rates right now to sell lots of debt right now. (Which is what Krugman is saying, in part.)

Agreed.

I already agree and stated I am for borrowing money for certain things that are also stimulus. Such as your earlier comment for a small amount, of 350 billion or so to help states out and shore up the safety net.

But as far as anyone having any true facts in a situation we haven’t been in, in most of our lifetimes, I don’t think so. We have theories and faith, whichever remedy we come down on.

My basic position is take good care of the safety net and start collecting more revenue by taxes. LOL, people hollering about creating jobs that have largely already done gone overseas. What jobs are you all talking about exactly.

I am arguing for an entire new mindset based mostly on real capital with borrowing for steady sustainable growth. Otherwise, we are propping up the same system will only return us to where we are, but with bigger bills to pay. i think we are mostly fucked long term, but maintain some faith in American spirit and figuring shit out at the last possible moment.

The financial woes of the middle class aren’t the result of excess spending, but diminishing incomes when adjusted for inflation. We aren’t living beyond our means because our living has become intensely more expensive than that of our forebears. To some degree it has, but not in any of the important metrics.

The problem is that the means to pay for it has been taken away. Lenders are essentially filling that void in demand.

I am not claiming that anything like this will, can, or even could happen. But we have seen higher rates (than 3 to 4 percent) in the past, when the US did not collapse. So we probably will again (without the US collapsing). So we should probably take advantage of the great rates right now to sell lots of debt right now. (Which is what Krugman is saying, in part.)