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The Key Question: Increase Debt or Write It Down?
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THE Key Question Ignored by Economists and Policymakers Is:

Should the Fed be increasing debt or writing it down ?

Will the One Percent in a futile attempt to save its own paper wealth doom us all?

(Republished from by permission of author or representative)
• Category: Economics • Tags: Coronavirus, Financial Debt 
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  1. Clearly much debt should be written down (ie student loans, medical expenses).
    Bonds & equites should be allowed to fall till they reach a more realistic level (ie price to earnings).
    Some Co’s will need to be nationalised & rebuilt (some may be then sold, some retained by tbe government to be “market leaders”)
    However, THE most important thing is that there be major, across-the-board REFORM. Real reform, not Dodd-Frank bogus reform.(ie NO share buy-backs, limits on executive compensation [ie say 30 times the earnings of the lowest paid in the Co], strict controls over derivatives, & so on)
    Absent such major reform & the CIRCUS will start up again & the same problems will reemerge, sooner or later.

  2. The solution is pretty obvious – commandeer the Social Security Trust Fund. The GOP and the Dems have been lusting to do this for a generation. And they laid down the foundation to eliminate Social Security and Medicare in the new “stimulus” plan. Companies are now authorized to spend the payroll taxes they withhold for these programs, being allowed in the new law to defer remitting the money to the Treasury until some unspecified date next year. Wanna bet how loudly we’ll hear Mitch McConnell mumbling in 2021 about how wrong it is for the big bad guv’mint to take this hard-earned money from the poor struggling corporations when the bill comes due?

    • Replies: @Franz
  3. Franz says:

    The solution is pretty obvious – commandeer the Social Security Trust Fund


    Isn’t that already gone?

    I seem to recall a few news reports saying the “Clinton Surplus” of the SS fund was used by Bush and Cheney to jump-start the Mideast wars after 911.

    Whether it’s gone now, or will be gone later, I consider it a dead issue. During the Carter-early Reagan years the Republicans kept their beating the gong about Social Security not being a “retirement fund” and some of the more impatient of the downsized said, “So turn it into one!”

    What they meant, I mean, was give the system some legs. Boomers hence allowed themselves to be taxed to build the surplus. This way, a person downsized 3-4 times (I’ve seen it) can find some cheap lodging and live his final years out in (near) dignity.

    Well. One way or another, there sure ain’t no surplus now. Can Washington do anything but lie and steal? Most irritating fact here is, they’ll never tell the workers where their money went. They don’t have to.

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