I think Samuelson is correct, and Krugman doesn't differ on it, that the Reagan disinflation was mostly a monetary matter. And you can sustain an argument that Carter appointee Paul Volker couldn't have continued with the scorched earth approach without Reagan maintaining a modicum of political support (the GOP got whacked in the '82 mid terms and Reagans popularity was about where Obama's is now).
But anyway, not exactly a ringing endorsement for the universal application of austerity.
Goes without saying that back in those days farmers weren't all hard money types and Volker remains a dirty word in farm country, Reagan not so much.
Well, Reagan was a cheerleader, but he had a good country with good people and a good "demographic" to work with in the 80`s. We still had a manufacting base, we weren`t yet at the "point of no return". Reagan made his "magic' work by starting the free trade debacle that and Volker raising interest rates due to the powers that be`s irrational fear of inflation .
Reagan had debt to GDP in the 30%`s, but it quickly rose every year to 107% ...if we had Paul Volker`s interest rates today, the SHTF in a matter of days.
today Republicans say "pick me pick me I`m more like Reagan" ...well Reagan kind of opened the flood gates that got us in this mess. In my opinion, we need a Teddy Roosevelt trust buster.
what we need is someone that can convince our debters to "take a haircut", someone that can trim entitlement spending, someone that can rein in military spending and pull our troops back home, and someone that is convincing enough that people who make money and believe in the grand future of America will ante up and pay more taxes.
And if you find such a person, please get the word out. I doubt if anyone like that exists, and if they do, they would be assasinated, either literally or figuratively , by the entrenchec powers that be.
I think we chronically underappreciate the extent to which our own good fortunes are the result of the exorbitant privelege of being inside the bubble of US financial hegemony.
I'm probably better set to withstand a huge shakeout than most and can probably even help tide my kids through a bit.
So much for the golden years playing shuffleboard- which I've prepared myself to not expect- but the greater fear is what form of governance emerges on the backside.
Short answer is that I guess I'm OK with a tight money isolationist retrenchment, but not sure that a lot of the proponents are nearly as well prepared as they think.
Hey Red, if 9/11 didn`t happen, I think George W Bush would`ve turned things around. If you look during his terms debt to GDP was actually down from Clinton. Trouble is Bush and the Democrats "took the bait" and Johnny went marching off to war. Reagan at least kept us out of war, he handled Gadaffi by blowing up his tent and a one day deal rescuing medical students on Grenada. That keeping out of war really pays dividends.
But you`re right the national debt will have to be written-off, maybe Don could give some tips on that
I don`t think any of us are going to be in a bubble if TSHTF because if you have money in the bank after the Cyprus experiment, "they" can take your money in the bank. If you own alot of farmland, you are a minority in the country and property tax is the last thing that can be taxed without 95% of the population not screaming. If you have canned food and a generator, a lonely farmhouse with a light and smoke coming out the chimney will draw mauraders like a moth to flame.
Yeah, we`ll all get a laugh at the local BTO`s getting foreclosed on a Tuesday, but we might be next on the docket for Thursday.
no, not really however during Bush, debt:GDP declined. In the 2000`s we did have a team that "was good at the phoney game". As I`ve explained in the past our money is borrowed into existance and that always comes to an end at some point. If there had been no 9/11 imagine how good we could`ve had it.
As far as entitlement reforms go, it is just a game for lifetime political employees like Ryan to sound serious and might result in a brief period of invigoration for The Confidence Fairy at best.
Entitlements are going to be reformed far beyond anybody's fondest hopes as a result of a great secular economic crisis, sometime in the not too far in the future. Whether a nominal tweak has been accomplished before is irrelevant.
I could be wrong in assuming this but nevertheless I will assume that there will remain some degree of income and medical support for the 60-80% of baby boomers who don't have any retirement assets to speak of.
The rub is where that line is drawn- the fourth quartile, 60-80% financially, is the remnant of the middle class. The burden of support will fall on their kids (or evaporation of inheritance) who are also trying to hang onto middle class status.
The 80-90% line is even a bit iffy and that's clearly beyond where any fiscally meaningful means testing would have to hit.
I remember someone's observation about a lot of "futurism", that most predictions of the future are just extrapolations of current trends.
In that regard I don't have a deep fear of zombie apocalypse wholesale civil disintegration. I think the better bet is just a continuance of the current trend toward authoritarianism and surveillance. Probably to be strongly supported by an auxillary of ad hoc armed militias.
Things that don't make sense usually deserve further examination. Surely the sharp move toward those conditions is just a logical tactic for the folks who ran off with the piggy bank to pull up the drawbridge.
As per Kissinger's famous observation that the nobles can retain power as long as the knights are on board- the serfs and footmen don't matter- I refuse to be a knight.
I'll sit it out but might swing the other way if it appears that the enough knights are turning.