4 ms·

"Technical default" and "Effective default" are obviously different, but if the purchasing power of the dollars you're paid in are only 1% of the dollars you've

"Technical default" and "Effective default" are obviously different, but if the purchasing power of the dollars you're paid in are only 1% of the dollars you've loaned, that's effective default. If the government practices effective default over a period of 50 years most people don't really get it. If the government practices effective default over 3-6 months, everyone will understand and it could be very destructive. It would definitely cause a lot of social unrest.

RobertoG 11y ago
Do you know what makes people poorer? Closing public services, not investing in infrastructure, reducing spending in science and technology, reducing spending in public education and public health. Those are real things. Why not we worry about this?
- msandford 11y ago
  Do you know what else makes people poorer? Having fixed expenses (housing) and roughly fixed income (salary) and growing expenses (food, clothing, energy, entertainment, etc). As your income grows slower than inflation -- and for many people it does -- your variable expenses grow and you have to start giving things up. You can't give up housing and you can't give up food so you have to buy cheaper food, cheaper clothing, etc. Of course, infrastructure spending is totally dwarfed by wars/military budget, so it's kind of disingenuous to suggest that in order to spend on infrastructure, public education or public health that debt must be accumulated. Cut the military budget by half and you can go hog wild, while still balancing the budget.
  - RobertoG 11y ago
    Maybe you can explain what is the mechanism in what salaries are fixed but inflation grow. "Cut the military budget by half " You will not hear me complain about that.
    - msandford 11y ago
      Maybe you can explain the mechanism by which salaries (or hourly wages) absolutely 100% keep up with actual inflation and purchasing power. I know plenty of folks that suffer from prices that rise faster than their 2-3% COLA.

RobertoG 11y ago

Do you know what makes people poorer? Closing public services, not investing in infrastructure, reducing spending in science and technology, reducing spending in public education and public health. Those are real things. Why not we worry about this?

msandford 11y ago
Do you know what else makes people poorer? Having fixed expenses (housing) and roughly fixed income (salary) and growing expenses (food, clothing, energy, entertainment, etc). As your income grows slower than inflation -- and for many people it does -- your variable expenses grow and you have to start giving things up. You can't give up housing and you can't give up food so you have to buy cheaper food, cheaper clothing, etc. Of course, infrastructure spending is totally dwarfed by wars/military budget, so it's kind of disingenuous to suggest that in order to spend on infrastructure, public education or public health that debt must be accumulated. Cut the military budget by half and you can go hog wild, while still balancing the budget.
- RobertoG 11y ago
  Maybe you can explain what is the mechanism in what salaries are fixed but inflation grow. "Cut the military budget by half " You will not hear me complain about that.
  - msandford 11y ago
    Maybe you can explain the mechanism by which salaries (or hourly wages) absolutely 100% keep up with actual inflation and purchasing power. I know plenty of folks that suffer from prices that rise faster than their 2-3% COLA.