Wall Street Banks Warn Downturn Is Coming

Re:Wall Street Banks Warn Downturn Is Coming by dragonwriter on Wednesday August 23, 2017 @02:03PM (#15083688)

Technically, you don't need to pay off the debt in expansions; you increase spending by deficit spending during recessions, increasing the debt to GDP ratio, and then curtail surplus spending (even without paying down debt, you can even do this with some net deficit spending) in expansions, decreasing debt to GDP ratio mainly by GDP increase. (This still oversimplifies a bit; you really care about the debt service cost to GDP ratio, not the debt to GDP ratio, but the two tend to move in the same direction.)

People dependent on income from wage labor need to pay off debt for sustainability because the ability to do labor eventually declines or is lost.

Governments aren't individuals.

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Re:Wall Street Banks Warn Downturn Is Coming by lend000 on Thursday August 24, 2017 @01:46PM (#15092316)

And in practice, Keynesian economies don't do the 'curtail surplus spending' part, so we end up where we are now with debt interest taking up a significant part of US spending, with signs of increasing significantly.

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Re:Wall Street Banks Warn Downturn Is Coming by dragonwriter on Thursday August 24, 2017 @06:05PM (#15094449)

The US basically has (measured by direction of change of debt-to-GDP ratio) in periods of economic expansion even as debt grew in the post-WWII period, except under Nixon and later Republican Presidents and Obama (and even in Obama’s case after the first term debt expansion overlapping the Great Recession and immediate aftermath, the second term was basically flat.)

I'm not sure there is a good case that “Keynesianism” is the problem; the late anti-tax orthodoxy of the Republican Party, which has nothing to do with Keynesian fiscal policy, seems more to blame.

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