Skip to main content

in a New York Times op ed titled Oligarchs and Money.  I am strongly going to suggest that you will want to read the piece and keep it handy.

He starts with the latest  World Economic Outlook of International Monetary Fund, which in its analytical sections

in effect makes a compelling case for raising inflation targets above 2 percent, the current norm in advanced countries.
He provides the history of aiming for too low a level of inflation, which he says demonstrates that low inflation is just as bad as modest deflation.  As he writes
An earlier edition of the World Economic Outlook analyzed historical experience with high debt, and found that countries that were willing to let inflation erode their debt — including the United States — fared much better than those, like Britain after World War I, that clung to monetary and fiscal orthodoxy.

He notes the IMF implies but does not say this, because it is oustide the conventional wisdom, of which he notes

In a direct sense, what we’re seeing is the power of conventional wisdom. But conventional wisdom doesn’t come from nowhere, and I’m increasingly convinced that our failure to deal with high unemployment has a lot to do with class interests.
By now you should be getting the thrust of this column:

- inlflation and inflation targets are too low
- that benefits the rentier class, which sits on cash
- that keeps unemployment too high

He does not directly address the political implications that this, combined with the unleashing of accumulated wealth through corporate expenditures in Citizens United and the gutting of most of what remained of campaign finance reform this week means the ability to address the economic reality of which he writes will become even more difficult.

Please keep reading.

Krugman writes that

Moderate inflation turns out to serve several useful purposes. It’s good for debtors — and therefore good for the economy as a whole when an overhang of debt is holding back growth and job creation. It encourages people to spend rather than sit on cash — again, a good thing in a depressed economy. And it can serve as a kind of economic lubricant, making it easier to adjust wages and prices in the face of shifting demand.
The target of 2%, that of the conventional wisdom, has clearly been demonstrated to be insufficiently low to avoid a liquidity trap:  after all, the US has effectively been in a liquidity trap for 5 years, despite historically low interest rates approaching zero intended to stimulate the economy, with inflation remaining low but unemployment remaining stubbornly high.  Oh, and as a class argument, in the attempt to avoid their fair share of taxes the oligarchs and their political minions have seen public employment slashed across those states controlled by their political minions with the concomitant stagnant employment situation in those states.  Thank you Koch Brothers and your various organizations, including especially ALEC.

Krugman is blunt -  the implications he is drawing from the IMF report is clearly demonstrated by the rich, personally and in corporate treasuries, sitting on cash.  But the report does not state its obvious conclusion, so Krugman writes

So why is the obvious unsayable? One answer is that serious people like to prove their seriousness by calling for tough choices and sacrifice (by other people, of course). They hate being told about answers that don’t involve more suffering.
That is, more suffering for others, not those at the top.

Which is what we would have in any form of the so-called grand bargain.  

Krugman notes that after World War II the US took the path of inflation andlow interest rates to wipe out the debt burden facing the country.   Somehow this became labeled as "financial repression."  And yet, as he opines,

But who wouldn’t prefer modest inflation and a bit of asset erosion to mass unemployment? Well, you know who: the 0.1 percent, who receive “only” 4 percent of wages but account for more than 20 percent of total wealth. Modestly higher inflation, say 4 percent, would be good for the vast majority of people, but it would be bad for the superelite. And guess who gets to define conventional wisdom.
By the way, that last hot link will take you to a Krugman blog post where he expanes this idea further.  You will want to read that as well.

I am paying close attention to what Krugman has to say, in part because I may change teaching positions next year to one where a principal part of my responsibilities would be teaching AP Economics, both Macro and Micro.   I see a clear understanding of economics as being a necessary part of helping people understand what is happening to what is left of our political democracy.  

Which is why I will push fair use and conclude as does Krugman in his final paragraph:

Now, I don’t think that class interest is all-powerful. Good arguments and good policies sometimes prevail even if they hurt the 0.1 percent — otherwise we would never have gotten health reform. But we do need to make clear what’s going on, and realize that in monetary policy as in so much else, what’s good for oligarchs isn’t good for America.
Read the whole thing.

Follow all the hot links.

You will be glad you did.


Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (25+ / 0-)

    "Don't ask what the world needs. Ask what makes you come alive and go do it, because what the world needs is more people who have come alive." - Howard Thurman

    by teacherken on Mon Apr 07, 2014 at 01:56:57 AM PDT

  •  Just phrase "grand bargain" should raise eyebrows. (2+ / 0-)
    Recommended by:
    onionjim, allie4fairness

    Dad 1912-78, Mom 1914-86, me 1959-? ... it's a unique perspective.

    by jwinIL14 on Mon Apr 07, 2014 at 02:03:48 AM PDT

  •  If people are sitting on cash, it's because we're (6+ / 0-)

    letting them accumulate and hoard a public utility without penalty.
    We are continuing to maintain the myth that currency has intrinsic value when, in fact, dollars are nothing but instruments of certified debt. All dollars constitute debt. So, since that's the case, the notion that we can retire all debts is ludicrous. We're certainly not, after 5000 years, going to get rid of currency/money.
    Granted, that money is worthless did not begin to be obvious until we stopped making the tokens out of precious metals. But, now that we signify our official debts with electronic digits, the reality that we are dealing with ephemeral figments of the imagination should become obvious. Indeed, that, I would argue, accounts in large measure for the desperate effort by the hoarders to hold on to what they've got. They're afraid that if they spend it, they'll never get it back. And that's a logical fear because the source of our currency, the Congress, has been rationing the distribution to advantage their own political influence.
    (That, btw, is what's behind the continuing effort to reverse the ACA. The direct distribution of dollars from the Treasury to health service and goods providers leaves Congressmen out of the loop. For example, if hospitals are able to cover operations and capital improvements and research endeavors out of remuneration for patient services, there will be no more need for special grants from Congress. Which means there will be nothing for a Congressman to take credit for. Congress has just about privatized itself out of influence and are now reduced to "the beatings will continue until morale improves.")

    by hannah on Mon Apr 07, 2014 at 02:23:53 AM PDT

  •  Thanks for the heads up. I went and left my (2+ / 0-)
    Recommended by:
    salmo, katiec

    comment, and they published it here, making it #56 for the year.

    The Times is apparently not very selective. Either that, or I'm their Georgia crackpot. :)

    by hannah on Mon Apr 07, 2014 at 03:03:22 AM PDT

  •  Go to the Grocery Store if you want inflation (6+ / 0-)

    Krugman clearly has not gone to a grocery store,  had to fill up a heating oil or propane tank, or tried to rent an apartment lately.

    Us poor folk can't handle much more inflation because it is killing the things we actually buy (food/energy).

    Low income folks spend a disproportionate amount of what money they have on those 3 things, so to make a bad situation worse because it will "help debtors" seems like the same trickle down snake oil the GOP sells.

    This is an example where there is a divergence between the book learning which in Krugman's mind validates his hypothesis, and the real world where people get slammed on food/energy/housing inflation regardless of the non-existent inflation the government is supposedly reporting once you strip out the things people actually use.

    This is exactly the kind of example where you become so detached from actual conditions on the ground that you are oblivious to the significant inflation low income folks have faced because you can point to a government study that says inflation is non-existent.

    The only benefits of higher inflation the working class would see is smaller quantities for higher prices living on ostensibly fixed incomes because raises won't be coming.

    He is calling for higher inflation to help the government with what will be massive interest payments in the next decade. He is hoping to "inflate our way out of the debt" the same way Reagan wanted to grow our way out of it through tax cuts."

    End result on both always leaves the poor and working class taking it up the rear.

    Paul needs to leave his ivory tower once in a while and visit the actual conditions on the ground. Not what some spreadsheet tells him is happening.  

    •  methinks you misread him (7+ / 0-)

      he wants mild inflation

      say around 4%

      given the large  number of people who have debts - credit cards, houses, cars, etc - modest inflation actually winds up giving them better spending power which leads to greater employment which benefits everyone

      especially if you have  COLAs to account for inflation

      that is, his approach on inflation is a comprehensive one that has clearly been shown to be superior to the auterity approach

      "Don't ask what the world needs. Ask what makes you come alive and go do it, because what the world needs is more people who have come alive." - Howard Thurman

      by teacherken on Mon Apr 07, 2014 at 03:26:26 AM PDT

      [ Parent ]

      •  "Mild inflation" (4+ / 0-)

        When you work for minimum wage and you're between the 8-10 year minimum wage hike cycle, that 4% is a 4% pay cut every year, precisely to those who need the money most.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Mon Apr 07, 2014 at 04:54:56 AM PDT

        [ Parent ]

        •  Worker's lot will not necessarily improve (3+ / 0-)

          Krugman's reference period, immediately following WW II, was marked by relatively high unionization.  I think that played heavily in the way higher inflation was translated to wages - that is unions were able to protect wage earners from the immediate effect of higher inflation rates.  Wage earners in today's economy would at least initially not be similarly buffered.  In a better world, that would result in a new impetus towards collective bargaining, presumably through some form of unionization.  

          Unionization didn't become the effective force it was in that post war period until unions were politically powerful enough to at least prevent the oligarchs from using the state monopoly on violence against wage earners taking collective action.  Prior to that, the history of labor was marked with shocking police, militia, national guard, and federal troop violence repressing worker rights.  The capture of our governments by the 1%, and the capture of the labor regulatory structure by corporations, concern me and make me skeptical of the ability of wage earners to affect similar bargaining this time around.

      •  Many economic policies have winners and losers (4+ / 0-)

        You really can't have an economic policy that benefits everyone, all the time.  

        It seems that in this plan, those with debt are the winners. Yes, the very rich who are sitting on cash would be losers.  (Wouldn't this significantly help the stock market and bond market as people shift away from cash, because it doesn't keep up with inflation?)  However, those at the bottom of the income scale who aren't in a position to get a 4% increase in salary every year would also be losers.  Other "losers" would be those who need to do more borrowing, as interest rates on everything from houses to credit cards would go up.  

        Of course, a focus on reducing long term debt in other ways, such as by cutting spending, also has winners and losers.

        Krugman's plan may be the way to go.  We just can't pretend that only "the rich" will suffer any downside.  

      •  Economics confuses me, but deflation on houses (0+ / 0-)

        seems to have been a big part of this mess.  Groceries and gasoline seem to be about twice as high according to my unscientific personal observations.  The current policy certainly is not working.

      •  Not everyone has a COLA... (0+ / 0-)

        Also, the Fed's ability to fine tune l inflation once it gets going is pretty abysmal. I just have to disagree that trying higher inflation is going to end up being a good thing for the 99%. There are all kinds of things that will happen. Those sitting on cash will begin to do something with it - they will want to buy a tangible asset with it. The stock market will tank because it is highly inflation averse which will make it  one less place to park money. Another real estate bubble might happen and all kinds of commodities might go through the roof because of investors wanting to own something tangible. I'm not sure that this would lead to more jobs. Of course - interest rates will rise. If you have debt at a fixed rate, it would be a good thing, but you get pwned if you have debt at a variable rate.

    •  My Sympathies (4+ / 0-)

      I've been tracking prices for my weekly grocery run for several years.

      We budget $100 a week for groceries and household supplies. It is amazing to compare what this bought in 2008 vs. today.

      At the same time, "inflation" and "price levels" are related, but they are not the exact same thing. Inflation refers to the expansion of the money supply, whereas price levels are just that -- the prices you pay for things.

      Even though we've had very low inflation by the official measures for years, the price on staples here in the New York City area has doubled or tripled during this same low inflation period. A box of pasta, for example, that was $1.19 in 2008 is now $2.69.

      This is because there are a lot of other factors that go into determining price beyond the size of the money supply.

      Right now, government is trying really hard to 1) create a scarcity of money and 2) channel what money there is to a few very rich folks.

      This is not right for any number of reasons. We are long past the point where we should have been thinking about printing our way out of this mess.

      "I'll believe that corporations are people when I see Rick Perry execute one."

      by bink on Mon Apr 07, 2014 at 03:28:37 AM PDT

      [ Parent ]

      •  costs of meat are going up a lot..... (6+ / 0-)

        as well as fruits and vegetables from California.  Drought is a problem for food prices.

        You shall know the truth, and the truth shall make you mad. Aldous Huxley

        by murrayewv on Mon Apr 07, 2014 at 03:39:09 AM PDT

        [ Parent ]

        •  I still think the inflation Krugman advocates..... (4+ / 0-)
          Recommended by:
          bink, teacherken, k9disc, allie4fairness

          is reasonable.  It requires salaries to increase too and helps student loans and house prices inflate out of their current loan value.

          You shall know the truth, and the truth shall make you mad. Aldous Huxley

          by murrayewv on Mon Apr 07, 2014 at 03:40:52 AM PDT

          [ Parent ]

          •  Indeed (2+ / 0-)
            Recommended by:
            k9disc, allie4fairness

            It might be too reasonable, in fact. It is hard to imagine how modest measures like this might help, but I'll support even incremental improvements at this point.

            "I'll believe that corporations are people when I see Rick Perry execute one."

            by bink on Mon Apr 07, 2014 at 03:44:08 AM PDT

            [ Parent ]

          •  Salaries *wont* increase (5+ / 0-)

            For that to happen, people have to have some kind of negotiating power.

            For upper middle class professionals, sure.

            Everyone else will just be told to eat the increase because if they don't, we can find someone else who will, or send your job overseas.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Mon Apr 07, 2014 at 04:57:36 AM PDT

            [ Parent ]

            •  Sorry, that's what's happening given that food (2+ / 0-)
              Recommended by:
              a2nite, allie4fairness

              and gas are not included in inflation.

              So that is what is already happening: the 70s called, they want their median wage back...

              So that being the case, might as well get some debt reduction, right?

              As is, we get to eat the inflation and keep artificially inflated debt.

              Democracy - 1 person 1 vote. Free Markets - More dollars more power.

              by k9disc on Mon Apr 07, 2014 at 05:31:52 AM PDT

              [ Parent ]

              •  You can't inflate away debt (1+ / 0-)
                Recommended by:
                Love Me Slender

                Does Krugman think foreigners are idiots?

                4% inflation means 4-5% interest rates. This will crush the housing market and cause 4% pay cuts per year to working people on top of it.

                You say "well, it's already happening anyway". By that logic, jump off a cliff today. After all, you'll die someday anyway.

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Mon Apr 07, 2014 at 05:44:51 AM PDT

                [ Parent ]

                •  That certainly is the threat. But look at our (0+ / 0-)

                  economic situation now.

                  We've got inflation going on - all the drawbacks but we're not getting the benefit of debt reduction.

                  I'm not talking about creating inflation to reduce debt, I'm talking about having it honestly displayed and getting the natural benefits of debt reduction that we should be experiencing based on QE and loose monetary policy.

                  Democracy - 1 person 1 vote. Free Markets - More dollars more power.

                  by k9disc on Mon Apr 07, 2014 at 06:02:42 AM PDT

                  [ Parent ]

          •  How does it "require" salaries to increase (2+ / 0-)
            Recommended by:
            Love Me Slender, VClib

            to the tune of 4% a year?  

            •  It doesn't...and while we're on the topic... (1+ / 0-)
              Recommended by:

              Does embracing Krugman's theory now mean we will now embrace Chained CPI? Surely it would be necessary so that payouts keep up with the increased costs of goods and services.

              Adequate health care should be a LEGAL RIGHT in the U.S without begging or bankruptcy. Until it is, we should not dare call our society civilized.

              by Love Me Slender on Mon Apr 07, 2014 at 06:49:16 AM PDT

              [ Parent ]

    •  Food and energy prices are volatile. Although they (1+ / 0-)
      Recommended by:

      are trending upward, that is different from overall inflation.
      Housing costs are up because major financial interests are, in effect, hoarding housing units that they acquired during the crash.
          In order to have general inflation, the Fed would have to increase the money supply (by a lot.)

      •  It has already been expanded (1+ / 0-)
        Recommended by:

        The balance sheet has already grown from around $900 billion pre-recession to over $4.1 trillion and it hasn't done much of anything other than see the bottom 90% of people in this country fall behind.

        Keep on growing it and you will get more of the same as the free money for the banks allows them to keep buying up all the homes in this country to soon become the largest landlords we could ever dream of as well as running up food and energy prices because it is easy money.

        The Fed, the banks, and the government have an incestuous relationship right now that is unholy and unhealthy.

        All 3 entities benefit handsomely through the current arrangement and none of those 3 parties seem to give a shit that outside of about 10% at the top the rest of us are getting hammered and it is unrelenting.

      •  Of course they're different... (1+ / 0-)
        Recommended by:

        CPI overstates the cost of housing and understates the cost of food and transportation. This in spite of the fact that a large percentage of the working class spends far more on food and transportation than housing. In fact, I would venture to say that families with more than one child spend the largest proportion of their disposable income on food, yet food is given a 15.757% share in the calculation of CPI.

        Here are the numbers:

        Housing: 43.421%
        Food and Transportation COMBINED: 31.071%

        Adequate health care should be a LEGAL RIGHT in the U.S without begging or bankruptcy. Until it is, we should not dare call our society civilized.

        by Love Me Slender on Mon Apr 07, 2014 at 06:56:21 AM PDT

        [ Parent ]

  •  Yes, By all means, Let's Destroy the Savers (2+ / 0-)
    Recommended by:
    slipper, Sparhawk

    and people living on fixed incomes -- just to pay off the debts from Bailouts that were handed over to the Rich.

    It's just not fair. It's 98% of the Politicians that give the other 2% a bad name. (both parties)

    by CitizenOfEarth on Mon Apr 07, 2014 at 03:49:08 AM PDT

  •  Things get more expensive (1+ / 0-)
    Recommended by:

    but when they calculate inflation, those items are not included in the figures.

    How to pry the money from the crooks who stole it? A nice big Wall St. transaction tax. Capital gains tax on a sliding scale. Maybe we could have something like a rule of law in the finance world, instead of the wild west.

    If nothing gets done soon, its going to be pitchforks.

    A true craftsman will meticulously construct the apparatus of his own demise.

    by onionjim on Mon Apr 07, 2014 at 03:50:45 AM PDT

  •  We have inflation; everything's more expensive (2+ / 0-)
    Recommended by:
    slipper, allie4fairness

    Except for us. The evil 1% fixed it to keep a jack boot on our necks.  

    Whatever can help, I'm for.

    nosotros no somos estúpidos

    by a2nite on Mon Apr 07, 2014 at 03:54:37 AM PDT

  •  The problem with Krugman's argument (1+ / 0-)
    Recommended by:

    is that salaries aren't going anywhere. In past inflationary times in the US, salaries went up significantly. But in the last 10 years, salaries have been completely stagnant. While prices have risen. Krugman wants more of this? We need to start encouraging people to save, not making it impossible to do so.

    •  Because we've been (0+ / 0-)

      fighting a deflationary spiral since 2008. Yes, prices of some things have gone up but that is not inflation by definition. Much of that has to do with the Oligarchs stuffing their cash into commodities to avoid the deflationary environment their stupidity created to begin with (housing crash). In order to have actual inflation wages would have to rise as would M2 money velocity.  None of that has happened.

      ~War is Peace~Freedom is Slavery~Ignorance is Strength~ George Orwell "1984"

      by Kristina40 on Mon Apr 07, 2014 at 04:50:57 AM PDT

      [ Parent ]

      •  You're joking, right? (1+ / 0-)
        Recommended by:

        "Deflationary spiral"? The cost of EVERYTHING priced in dollars is much, much more now as compared to 2008. I don't care what it is - gasoline, food items, medicine, stocks - it costs more. We all know that CPI is a cooked measure. If it wasn't, everyone around this blog wouldn't be so against chained CPI.

        What's more, this has all come at a time when median household income has flat-lined for the better part of a decade. People are tapped out.

        And what's this drivel about M2 money velocity? M2 is just fluid cash plus savings...and the savings rate has been somewhere between 3-4% for the better part of 4 years now. No one has money to save...and even if they did, record low interest rates provide no incentive to join the M2 crowd.

        The fact is (as one commenter noted above), Krugman can write about this because higher inflation doesn't bean shit to him or any others in his little world of academia. Right now, working Americans can barely afford to put gas in their tanks and food on the table. Inflation only makes the wealthy wealthier.

        If you want to harm those people, make their stocks worthless. As for the working folk, I'm sure they would appreciate the $2/gallon gas and milk and to be able to afford fruits and vegetables again.

        Adequate health care should be a LEGAL RIGHT in the U.S without begging or bankruptcy. Until it is, we should not dare call our society civilized.

        by Love Me Slender on Mon Apr 07, 2014 at 06:46:17 AM PDT

        [ Parent ]

    •  Globalization (5+ / 0-)

      Salaries aren't going to rise, because with the interconnected world companies will just move any job they can to somewhere cheaper if raises and Cola's start appreciably going up.

      Second, Krugman needs to stop referencing the post WWII period as if it has any applicability to today's situation. We were the only country in the world not ravaged by the War. We were essentially the lone supplier that rebuilt the world with no competition because everyone else was decimated.

      To your point about savers, I agree 1000%. It is downright criminal what the FED and the zero interest rate policy punch bowl have done to seniors that have no ability to earn any interest income (on money they spent an entire lifetime trying to scrape together for their golden years) unless they hand it over to Wall Street.

      Sadly the situation has become such that we literally can't afford to ever see interest rates return to historical norms.

      If interest rates were what they were in the Clinton years of a good economy it would swallow the federal budget whole. It's a win/win for the banks and the government.

      The government gets to borrow for almost nothing which enables them to keep ramping up debt without much fear and Wall Street gets the kickback of similarly borrowing for nothing leaving them free to speculate and ramp up prices of goods those poor folks use.

      In a classroom Krugman is making a rational argument.

      In the real world as it is telling people more inflation is the answer to their prayers is tone deaf knowing full well that all the caveats about Cola's and such aren't realistic.

      Not to mention, if this is what the government considers a "1%" inflation rate environment currently I tremble at what 4% looks like in reality (not the CPI version that strips out any and everything people actually use on a regular basis).

      •  A Rational Classroom -- WHich Krugman Opposes-- (0+ / 0-)

        has nations that manage their trade, so that when businesses flee for cheap labor, they pay a price to sell back home to their unemployed ex workers.

        We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

        by Gooserock on Mon Apr 07, 2014 at 05:19:26 AM PDT

        [ Parent ]

  •  Inflation benefits those with... (3+ / 0-)

    ...first access to money and credit, i.e. the rich.

    Upper middle class professionals can just renegotiate their salaries. Minimum wage workers cannot: they'll just have to eat the hit to their purchasing power.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Mon Apr 07, 2014 at 04:51:54 AM PDT

  •  Middle class retirees strongly disagree. How is it (3+ / 0-)

    possible to retire when savings don't generate income? We are too old to recover from a loss in stocks or bonds and have to depend on IRA/401(k)'s & Social Security. I am a miser and have been able to weather both 0.5% short term CD's and a 30% drop in the US$ against the local currency. But, a whole lot of USA retirees have slipped into poverty because of almost zero interest rates. Oh, and if the Grand Bargain is struck, it will put us on the road to being destitute, and everyone following us will have it even worse.

    I voted with my feet. Good Bye and Good Luck America!!

    by shann on Mon Apr 07, 2014 at 05:21:45 AM PDT

    •  inflation and interest SHOULD go together (3+ / 0-)

      except that the financial interests have found ways to raise the interest rates they charge us while keeping the interest rates they pay us down.

      That is also an issue that needs to be addressed

      concentration of financial power into ever fewer institutions has removed any market pressures that could affect this, which therefore requires further government intervention, including breaking up those massive financial institutions, separating out commercial and investment banking functions, etc.

      "Don't ask what the world needs. Ask what makes you come alive and go do it, because what the world needs is more people who have come alive." - Howard Thurman

      by teacherken on Mon Apr 07, 2014 at 05:40:14 AM PDT

      [ Parent ]

      •  The interest on my checking account is <1%, but (0+ / 0-)

        there are students paying off 14% loans.  We need to find a way to match up students and older people with savings.  Many years ago my student loan was at a 3% interest rate.  How could we crowd source this?

  •  Coming round... (1+ / 0-)
    Recommended by:

    Eventually, I think Paul and other leading economic thinkers will come to believe that the low-tax mania that's defined our politics for decades now is in fact the problem.  We have to provide a disincentive to wealth owners for them to simply "warehouse" their wealth.  Use it or lose it...

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site