Reply #26: Four comments

[Lithos]

1) This is a worst case scenario painted purely for media exposure.

2) It assumes that the current fiscal stimulus does absolutely nothing and actually makes things worse by increasing the indebtedness.

3) The model being used is based on what happened to Japan and assumes that things are going to be caught between a double whammy of deflation coupled with rising debt. Deflation will kill the money supply (salaries, etc.) while rising debt will cause people to get further and further behind.

4) It also assumes nothing else happens which does things to secure assets and/or move real interest rates (for things you pay) down to zero.

From my way of thinking, allowing people to gain some relief via their mortgages coupled with a real cap on credit card interest would give most of what is necessary to fix the current problem. Fixing the incredibly broken (pun intended) bankruptcy laws which were enacted by the same corrupt (moral, etc.) Republican Congress and Presidency would also help people get out from a bad situation made worse by obvious corrupt meddling and gerrymandering of the economy by the Republicans designed to make the rich richer at the expense of the middle class.