tag:blogger.com,1999:blog-11719208.post5298849222532717506..comments2023-11-05T04:36:14.223-08:00Comments on The Mess That Greenspan Made: The paradox of thriftTimhttp://www.blogger.com/profile/16530974968126497397noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-11719208.post-36057671047854465672009-09-23T04:02:19.220-07:002009-09-23T04:02:19.220-07:00The US consumes too much, and several other nation...The US consumes too much, and several other nations consume too little. The US can't go on being the consumer of last resort for the entire world forever. Private debt is already too high to repay, and private citizens can't borrow much more now that this has become obvious to saving nations.<br /><br />The formulas the Fed uses assume a closed system, which is why the Fed keeps trying to force US citizens to borrow/consume what other nations don't. This cannot work in the long run, and there is no exit strategy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-5425744597155483842009-09-21T18:41:55.938-07:002009-09-21T18:41:55.938-07:00Easy fix, just give everyone a big fat raise, then...Easy fix, just give everyone a big fat raise, then they can both save and spend!Alanhttps://www.blogger.com/profile/00449919969036824198noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-22244833413299298152009-09-21T14:45:05.845-07:002009-09-21T14:45:05.845-07:00I truly don't understand why we don't see ...I truly don't understand why we don't see more about this 70% statistic. No one dares to say what it really means.<br /><br />To make it clear, let's start with 100%. Divide 100% into three parts and you get three times 33% (plus a bit but who cares). Now, 70% is roughly two times 33% (one-third of 100% you will recall from about five seconds ago). <br /><br />Why all the fifth grade math?<br /><br />Because an economy running on 70% consumption is an economy that consumes TWICE what it produces. <br /><br />yes, that is correct. Imagine spending twice what you earned. This is what we do as a nation.<br /><br />If you ignore stockbuilding and stockdraws (reasonable over the long term), a global economy MUST be balanced with consumption equaling 50% of the economy. Any other ratios lead to inflation, deflation, or the disappearance of segments of the economy.<br /><br />Yes, you! Fat, Cheez Doodle eatin' Yank! You eat twice as much as you make! <br /><br />-Expat<br />p.s. One day I will learn to log inAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-74747139779074029322009-09-21T13:58:12.748-07:002009-09-21T13:58:12.748-07:00Hi Tim, I agree that our consumerist country has g...Hi Tim, I agree that our consumerist country has gotten out of hand but you are missing something. The income inequality argument.<br /><br />Debt has replaced income and exasperated the problem.Adam2https://www.blogger.com/profile/03710514839937913226noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-69036405795735603152009-09-21T13:57:27.530-07:002009-09-21T13:57:27.530-07:00This comment has been removed by the author.Adam2https://www.blogger.com/profile/03710514839937913226noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-78946792827336675302009-09-21T11:45:51.308-07:002009-09-21T11:45:51.308-07:00China has been at 40 percent for some time. If mem...China has been at 40 percent for some time. If memory serves, up until the late 1980s, the U.S. was somewhere between 60 and 65 percent.Timhttps://www.blogger.com/profile/16530974968126497397noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-16844391710274707262009-09-21T11:29:29.442-07:002009-09-21T11:29:29.442-07:00Over and over again, with wringing of hands, I hea...Over and over again, with wringing of hands, I hear that 70% consumer content of GDP is unsustainable. But I never hear what level is sustainable? Nor even what is the historical consumer content of GDP.<br /><br />Can you provide any context to this number?Anonymousnoreply@blogger.com