Longer Step: Ideas for Justice and Sustainability

 As small banks are failing due to lousy management, I've been thinking a lot about why we need banks. We actually don't. America is addicted to debt. We have to have a good credit score, in order to get a job, get an apartment lease, get a mobile phone, get cable TV service, etc. If you avoid debt in your life (as many of our immigrants do), you are significantly punished in the US. Having a good credit score has become proof that you are a reliable person in non-financial ways. Without debt in America, you are a lesser person. Think about that. 1. Isn't it interesting that a good credit score, which proves you are a trustworthy person, can only be obtained if we buy lots of stuff on credit? Meaning, if we buy lots of stuff. Hmm--I wonder if big businesses had anything to do with this system of compulsory borrowing?  2. In most other countries, people have far less debt, or often, no debt at all. It's seen as a sign of poverty, of hopelessness. 3. And "cheap debt...

This article in National Affairs is too long and meandering, but I love this line: " Paying off bonds with currency that is worth half as much as it used to be is like defaulting on half of the debt ." I've been thinking (and saying) for a long time that we will see inflation, not deflation, because the only way to repay the federal debt is to do it with ever-more-worthless dollars: Print too much money, cause inflation, and repay the debt with devalued dollars. Our government is stealing our future from us, in order to keep the balls in the air a little longer. But it is a sucker's game, and at some point it will become obvious to everyone that the US dollar is worthless. And all who hold their wealth in dollars at that time will suddenly realize they are financially ruined. A sane economic plan would see: a. Progressive income tax rates that raise enough money to fund the entire government's expenditures for the year; b. A vast (VAST) reduction in federal spend...

  Highly recommend Lyn Alden ; she (having a rare combination of an engineer's mind and an economist's training) is a national treasure re unlocking the mysteries of the economy; national debt; the Fed; etc. The Fed is trying to increase unemployment (you read that right), in order to reduce demand, which should reduce inflation. But that will also likely cause a recession. So if you need to make a big expenditure, it might be savvy to postpone it IF it is the sort of cost that is unusually high now but normally cheapens during recessions (e.g., using contractors to do some construction work). But if the item is subject to inflation (e.g., a new car), it's anyone's guess how successful the Fed will be in controlling inflation, and when you should buy. This entire mess could become painful and ugly. She makes the point that it's like the 1940s again for the US, except this time we are a debtor nation in decline, with a mostly-aged population demanding a heavy load ...