About that deflation risk
Paradox of thrift
Paul K and maybe Larry S seem to be setting themselves up to realize that, in a debt deflation, the best _policy_ might be to ... er, ease the debt burden ratio, one way or the other.
Do whatever it takes: outright cancellation (pre-packaged bankruptcy, but less-so liquidation), debt-for-equity, and fixing the stupid bankruptcy reforms of 2005, and anything else that economically equates to 'paying negative interest rates'. Artificial incomes ... probably not enough to do the trick, if the problem is large or intractable or sentiment already firmly in the wrong direction.
Wealth transfer is often a dirty word; but, in my opinion, those most worried about it lost their discipline during the high-flying years, a discipline forged in fire during the 1930s ... Time to pay the piper, sadly - and no joy in that, for anyone.
Thursday, February 5, 2009
Just the facts, Ma'am
