Consumers are so indebted that only Keynesianism may prevent a double-dip recession?

Discussion in 'Economics' started by crgarcia, Jun 18, 2010.

  1. Consumers all over the world are broke.
    (They were already so for many years, but they kept spending on credit)?
  2. the1


    Consumers are still in the process of de-leveraging. It's going to take a few more years to run its course but when it does we will return to a more normal economy where people actually save to buy something. It's funny though, I still get those credit card offers in the mail for 0% for six months or a year. Maybe it will just be business as usual or perhaps those offers will only be available for highly qualified borrowers.
  3. TGregg


    Yeah, the answer to too much debt is more debt! Got trouble with the bottle? Go to the store and load up! And if you have a heroin addiction, score some more to find the cure! Crystal rotting your teeth? Smoke an ounce and you'll be set!

    The first step is admitting you have a problem. I am not sure we are there yet.
  4. zdreg


    recessions purge the excesses out of the business cycle and lays the foundation for the next upswing. governmental interference can only magnify the next downswing. as they always do market forces eventually overwhelm the governmental interference.
  5. This is what scares me.

    This excesses took many decades to develop (they are the result of fractional lending and abolsihing the gold standard).

    So it may take a few decades of long-lasting recession to shake off the excesses.
  6. Like always, the way to go is the golden mean. It´s about finding the "equllibrium" between spending and savings. I know, it´s a hard job, though. :)