To that list we can add the ‘Deadbeat Dad’ crisis, which is a government manufactured problem. People often run up credit cards because they are not given any other choice. In NY State for example, there are more than 100,000 family breakups every year, and at least half the men end up bankrupted and near the poverty line. Government policies allow a bankruptcy proceeding to discharge debts,— but other policies prevent the possibility of being able to work your way back up out of the hole.

Having gone through difficult times firsthand, I can tell you after a year (or more!) of forced austerity and paying down one’s debts, plenty of people felt compelled to make it up to stressed children and spouses at Christmas. This is not rocket science in the world of consumer behavior!

What will be more telling will be if the growth of consumer credit continues to form a trend. Considering the depth and breadth of all the deleveraging going on in both secured and unsecured credit (not to mention continued growth of unemployment and commercial deleveraging), my bet is there is no trend.

Everyone I talk to continues to pare their personal budgets – not the recipe for the Big Recovery so many believe is now underway!

JMHOAU

The problem is not that Obama is focusing on healthcare. It is that he is focusing on a totally misguided and ineffective version of healthcare. Essentially it is just like the bank bailouts and virtually everything else the government focuses on. The politicans are focused on funnelling wealth to the plutocracy, the oligarchs, the special interests, and the money that is “donated” to them to get elected.

One has to ask how it is that Japan, Germany, Switzerland, Holland, Taiwan, and virtually every other developed country has managed to “enact” responsible national healthcare. Because they all have. And by and large, they are all privately run healthcare systems. Meaning the health insurance companies are private, the doctors are private, the hospitals are private. The only thing these governments have done is to “enact” comprehensive national healthcare rules that all providers and all consumers have to accept. If Obama were to take the same approach in the US, then the economy would be on the road to being fixed. And over $1/trillion annually would be freed up to put towards more productive purposes … such as R&D, infrastructure, solving the energy problem, etc.

However, Obama, as are all politicans, is beholden to the plutocrats and the vested interests who fund all politicans. And as always, all special interests are only interested in one thing, namely maximizing their share of the pie regardless of whether or not they provide economic value for the good or service they coerce the politicans into giving them preference and “legal privledge” to.

The only real solution is for a third political party to emerge to combat the corruption endemic in both the Democratic and Republican parties and the big money and special interests that have gained control of them. Unfortunately, most Americans just do not understand the severity of the problem. So, it probably will take another Depression for this to really hit home.

I see you did not read any of those links I provide in your gold post.

The UK was not on a Gold Standard, it was a Gold Exchange and there is a big difference. This was a crazy plan that was doomed to fail. Please read about the Genoa Conference for the details:

http://en.wikipedia.org/wiki/Genoa_Conference_%281922%29

http://mises.org/money/4s3.asp

The main problem with a Gold Standard or any commodity backed currency is the QUANTITY OF MONEY being backed by it, as bankers and governments have an incentive to inflate the money supply.

http://www.swarmusa.com/vb4/content.php/201-The-Fallacy-of-Gold-Backed-Money

Again, I support Freedom’s Vision – Monetary Reform policy which you can find through the link above.

It will never matter how smart all of you guys are on finance if you do not recognize the fact that the political system you live in decides how you can or cannot operate financially. Obama is devoted to bringing all of the economy under the control of the government; call that economic type of system by whatever name you will. He is even willing to wreck his own party and be a one term president to do so ( he is on record to that). You and KD are agreed on all points except the possibilty of default. I have read both of your columns for almost a year now. Right now I don’t think there is much we can do to avoid the double dip. I do believe as you do that there are many fixes available to improve our situation going forward rather than making it worse as the current leadership is doing. Obama and the Democrats are intent upon increasing taxes, and that is absolutely the wrong way to go. Many representatives of small businesses have been on various programs making recommendations to improve the situation, not one of them said to raise taxes.

I think I’ve come up with the perfect solution….printing presses for households!!! Isn’t this fantastic. No more household defaults. Consumption is bound to rise, I might go buy myself a new house tomorrow, cost is no object. Obviously inflation risks are minimal, for the reasons TPC has pointed out above. And, on the off chance that the dollar devalues just a bit, think of the benefits to our export sector. I’m sure China and Europe and Japan and all the rest will be perfectly happy off shoring their manufacturing capacity to us so that we can get back to full employment. Now that we have a nice liberal pres, I’m feelin’ the love from overseas.

And as an added advantage, we can replace all those cheap items we import now, like everything we buy, with shiny new union made stuff from the good ole USA. Not a problem…once we rebuild all the factories using money from our very own printers since the foreigners aren’t likely to be doing much dollar lending. Price increases as we ramp up this great new economy? Well, that’s what the printers are for, correct?

I guess one could posit that individuals might be irresponsible with their printing presses, but governments have been irresponsible spenders for decades and they still get the benefit of the doubt from some quarters. I’ll even cut the govt some slack now; if they spend too much, go ahead, raise my taxes. I’ll run off another stack of hundreds for you guys. Keep the change.