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Look at the economy from a bigger picture scale. We have a very debt based system. About 97% of money is brought into existence as debt. And that debt is eventually paid off using other peoples' debt which they in turn pay off using somebody else's debt and so on. It's kind of like a game of hot potato where you constantly need ever more debt coming into existence to keep passing the potato. When people stop lending or investing then we start reaching the point where that potato is going to drop. And it will eventually but the idea is to delay it as long as possible. We have an idiotic economic system but are so invested in at this point that we can't change it.
This graph from the fed illustrates things quite clearly. The United States as a whole (and not just the government) is more than $59 trillion in debt (that's more than $180k of debt for every man, woman and child in the USA) and that figure is skyrocketing. In 1980 before Reagan came into office that figure was 'just' $4 trillion. The giant debt machine only temporarily stumbled during the 2009 recession that was caused by a brief acknowledgement that we're creating lots of debt that isn't very good. But in reality, none of it's good. It's funny money, but so long as we keep playing hot potato with the debt we can keep kicking the can onto another generation to deal with.
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[–] rwbj 0 points 1 point 1 point (+1|-0) ago
Look at the economy from a bigger picture scale. We have a very debt based system. About 97% of money is brought into existence as debt. And that debt is eventually paid off using other peoples' debt which they in turn pay off using somebody else's debt and so on. It's kind of like a game of hot potato where you constantly need ever more debt coming into existence to keep passing the potato. When people stop lending or investing then we start reaching the point where that potato is going to drop. And it will eventually but the idea is to delay it as long as possible. We have an idiotic economic system but are so invested in at this point that we can't change it.
This graph from the fed illustrates things quite clearly. The United States as a whole (and not just the government) is more than $59 trillion in debt (that's more than $180k of debt for every man, woman and child in the USA) and that figure is skyrocketing. In 1980 before Reagan came into office that figure was 'just' $4 trillion. The giant debt machine only temporarily stumbled during the 2009 recession that was caused by a brief acknowledgement that we're creating lots of debt that isn't very good. But in reality, none of it's good. It's funny money, but so long as we keep playing hot potato with the debt we can keep kicking the can onto another generation to deal with.