Total loans and leases have increased by over $200 bln since the end of March, so private credit expansion is replacing falling government spending. That’s good because it’s keeping the economy supported, but it can only go so far as incomes have to be able to support the expanding debt service. The problem is, incomes have been falling.
Take a look:
But personal income has started contracting...
So it doesn't look like this is sustainable for very long.
"Horizontal money" (private credit creation) needs income to sustain it.
"Verticle money" (the government's fiat) adds to income.
It's a lot better to have the latter than the former, at least during times like now.
College degrees take a few years so maybe the spike in student loans could hang on a while longer
ReplyDeleteMike, Tom, Matt, Kevin, et al :
ReplyDeleteCould you start a post to compile a list of all political figures who either have been in political office and/or have worked at Goldman Sachs ?
From North America to Latin America, South Africa to Egypt Israel, EU to RU down to India China and Japan ?
A secondary to this would be moral equivalence of a "Goldman Sachs", perhaps a Nomura or Soc Gen.
THIS would be very helpful to MMT purpose because it would provide a Global sweep of those using the system without the transparency that MMT can provide - it would also allow us to follow the assine statements these idiots make to the public, but turn around and use crediting via federal banks for their own purposes -
Could it happen ? You guys almost started it in a blog a few days ago naming a few rotary ding dongs who are going from political office to Goldman and back. Even Corzine fits this description.
It would be good to see if they are Democrats or Republicans to see how hairy the situation is.
I would not limit it to GS. It would be an interesting exercise to do a study of the revolving door in all areas.
ReplyDeleteThanks!
ReplyDeleteGreetings, Mike.
ReplyDeleteWhy not have a list in the left frame with the clips of some of your TV appearances?
Yours is a powerful voice for MMT, both literally and metaphorically.
:-)
Regards,
Vassilis Serafimakis
George Packer keeps it real (h/t Tom Ricks).
ReplyDeleteThis inequality is the ill that underlies all the others. Like an odorless gas, it pervades every corner of the United States and saps the strength of the country's democracy. But it seems impossible to find the source and shut it off. For years, certain politicians and pundits denied that it even existed. But the evidence became overwhelming.
http://ricks.foreignpolicy.com/posts/2011/10/27/hey_it_turns_out_that_income_inequality_really_is_a_major_national_security_issue