Mechanical Components Blog

GA to Jerry. The administration acts like it has its own money. It is the money of hard working Americans that has been co opted and redirected toward the programs dreamed up by people who have never had a meaningful job or tried to earn a profit. They are supposed to be working for us and until we fire the lot of them and get some accountability we can expect more of the same. To make matters worse, they take us for granted and call us tea baggers.

A pox on their house!

What do you expect? We elected a president that is a known card carrying communist. This was known before the election but covered up by the pinko press. The american voters are swayed by celibrity and not fact. I can not for the life of me figure out why anyone would be swayed by the opinion of a bunch of actors. These are people that make a living by playing make believe. They work, live, eat and sleep in a make believe world and never come into touch with reality and the american public is swayed by their opinion... Good Grief... How dumb can you get?

as a guest, the remarks you made are valueless

Pretty Dumb!

Forcing the companies to write off debt? This sounds like the Nazi's answer to life's persistent problems. And rounding up the governement leaders and shooting them?

Pilloried maybe, but shot? I'm sorry, but there is no one I would trust with this heady assignment, especially you.

It appears you are misinterpreting my comments. And, for Heaven's sake, what sort of thought process equates Nazi ideology to corporate financial obligations? Your avatar, good sir, is aptly chosen!

I was not advocating the shooting of anybody - in fact quite the opposite. What I said was we should consider what may happen in the future if economic policy enacted today prolongs the issue and places an undue burden on future citizens - those who have had no say in the matter. Ayn Rand said it best - they will simply shrug it off.

Unfortunately, shrugging off government debt has historically been a messy affair (re: Boston 1776, Paris 1779, Moscow 1918, etc., etc., etc...) I would advocate a more peaceful approach that involves having the corporations and people who emplaced bad credit be subject to the consequences of their actions - not uninvolved future persons.

As for forcing companies to write off debt: this is a standard business practice when the companies make poor lending choices. Compelling citizens to incur the debt of companies who have made poor lending choices - this is a new experiment to Western society. It is one that most likely will not end well. Keeping debt alive to avoid the consequences of bad lending practices only prolongs the issue. Prolonged economic upheavals transform into social upheavals. I would urge people to avoid a prolonged upheaval.

I had to reread your posting to get the gist of your comments. I offer you an apology and give you a GA.

"Instead, force creditors to write off the bad debts even if this means writing off the companies who made them."

Living in an upside down world where ineptitude is rewarded and intellectual dishonesty is rampant I read the above statement as needing more government picking and chosing of losers and winners and installing czars who have no relevent qualifications. The only correct judge of an organization's value is the cold, cruel marketplace.

Add this......

"Historically, a simpler, more expedient and popular solution has always been to grab the political leaders, execute them, and then tell the creditors that the debt died with them"

and maybe you can see where it got scary. I took this as advocacy.

There are 2 economies.

"Real" economy. Tangible items of production, but includes services where they have a link to production.

"Virtual" economy. Share market, services which have no significant link to production.

When the money tied up in the virtual economy exceeds the real economy by too much (generally about a factor of 10), a readjustment is needed. This is known as a recession. (If severe enough it becomes a depression, but these days we can't have a depression because it will always be referred to as a "recession" - just more severe than usual.)

If we interfere with this adjustment process too much, it simply puts off the adjustment and the next one becomes more severe and probably arrives earlier.

Eventually, no amount of interference will prevent it happening and a major depression occurs.

(Evidence for this being a realignment of the virtual and real economies is seen by the number of solid businesses that started during a severe recession or depression).

If major companies are propped up and not allowed to suffer the consequences of many years of mismanagement and pillaging by senior management, then we can expect more economic crashes in the future.

As far as I can see, this current crisis is not over, simply deferred.

If no significant readjustment has happened, the next one will be worse. If it comes too soon, we will be in a worse position to see it through.