A concern about credit

[whymc]

I was reading an article today about the fight over extending unemployment benefits. I think that this is a particularly stupid place for people to be deficit hawks, but that's not the issue that I'm concerned about at the moment

Comments

[whymc]

That was an interesting read - I'm not sure I agree entirely with all of the premises, but the idea that we're edging toward a serious bout of deflation is deeply troubling - no better recipe for a lost decade... even hyper-inflation is better, because of the reset-button effect that it has on debt and wealth.

[whymc]

I'm not at all sure that the US government will need to default on any of its current promises. Something will need to be done to bring revenue and expenditures into balance, but there are still a wide array of options short of default (lifting the upper limit on Social Security taxes, raising certain tax rates, enacting more effective policies to limit the growth of health spending).

Your point about fixed incomes in inflationary/deflationary periods is a good one, and inflation certainly does punish those on fixed incomes. I'd still assert that inflation can be a good thing for poorer people who are not on fixed incomes, as it devours debt burdens very effectively under many circumstances.

[frausensei]

I haven't read it yet, but this book looks interesting. The author was interviewed on NPR.

[whymc]

Oooh! That does look like a nifty read - one that might get me angered-up, but a nifty read.

[financenerd]

From the WSJ Today

Another Relevant Article from the WSJ

[financenerd]

Don't be fooled by the latest news on credit-card debt. The true picture is worse than many people realize. And unless Congress renews extended unemployment benefits, you can expect it to get even worse

Re: Another Relevant Article from the WSJ

[whymc]

Interesting. Depressing, but interesting.