Rancid wrote:How do I get in on this shell game?
It's not a shell game in terms of the safety for the depositors.
It is a problem [based on my mostly youtube education on economics] for the economy as a whole. Too much private debt creates the risk that the borrowers can't make the payments. When this happens on a mass scale the public must stop spending. This starts a recession. The huge level of private debt makes the recession deeper and longer.
. . . This was the cause of the GFC/2008. It is the cause of the slow recovery in the US and the snail's pace recovery in the EU. Today there is even more private debt.
. . . This the damage that Neo-liberal economics has done to the world's economies. The workers are paid too little [and the rich suck up too much]. Because they are paid too little they need to borrow to spend. The nation needs them to spend because spending *is* the measure of GDP and therefore growth in the GDP. And, the demand to keep the deficit small adds to the problem of slow GDP growth. The only way [you see] for the GDP to grow is for the people and corps. to spend. They need dollars to spend, they get dollars from wages or sales, form Gov. when it deficit spends, or by borrowing them. Private debt must be repaid [or defaulted on (by bankruptcy if private), but Gov. dept can be repaid with dollars the Gov. creates.
this means that it is private debt that causes problems, not Gov. debt.
..Noe-liberalism allows or forces the following aspects ---
. . . . 1] By destroying unions and threatening to move the comp. to Mex., etc. it keeps wages too low. The workers have only gotten inflation size wage increase for 40 years.
. . . . 2] By allowing mergers to form monopolies to be able to charge too much for their products it sucks money form the workers.
. . . . 3] By demanding the deficits be small except when Repuds are in charge it keeps the Gov. from deficit spending to replace the lost spending that the workers can do because their wages have not gone up.
. . . . 4] So, the GDP can only grow because the people are taking on to much private debt. This debt helps the rich get richer from interest payments and is a problem because it causes recessions.
. . . . 5] If the workers were paid more and the Gov. could deficit spend a lot more the GDP would be much bigger.
. . . . 6] If you are a Green then you should want all the increase in the GDP to be form the US making stuff to make the economy much more Green. That is, spending to fight Global Warming.
. . . So, it is Neo-liberal economics that is causing most of the problems in the economies or the World. It recreates the problems that the gold standard was causing before it was abandoned.the world needs MMT economics.