"The Credit Freeze"

[gorfle]

Here's something I don't understand.

They keep telling us that we need to bail out Wall Street or "there will be a big credit freeze".

So what?

Isn't this the same thing as telling us that without credit, aka DEBT-FUNDED SPENDING, that our economy will stall?

Isn't this the same thing as telling us that there IS NO REAL WEALTH FOR US TO SPEND so instead we are using debt to buy things?

Maybe it's time for this economy to stop running on CREDIT (debt) and instead run on actual wealth?

[EFerrari]

1. No. If that happens, the economy will stop.

How in the world do you think start ups start up?

[edhopper]

3. People need credit

to buy cars and homes and start small businesses. How would your life be if you got not borrow for anything.

[EFerrari]

5. I think you meant to reply to the OP. n/t

[edhopper]

14. yes

I did. oops.

[onethatcares]

17. specially when a car costs as much as a house in the

previous life. When did people need start needing 4 bedrooms, 2 car garages, 2 1/2 baths a qtr acre lot and a fountain with their first home? sheesh, the first home we bought was a row house in Reading Pa. for 7K.

[gorfle]

Is it all about helping start ups?

Is it all about helping start-ups? I don't think so. I think basically America's economy has been fueled for the last 8 years on easy credit, consequently, easy borrowing.

Now that everyone is finally tapped out of credit they are desperately trying to make the banks feel good about lending even more.

The answer to this problem is not more credit. It's more wealth.

[EFerrari]

11. Wrong. There has to be a balance of available capital

to keep the economy going. This isn't "all about" anything. It's not about bailing out criminals and it's not about shutting down small business people. It's about a reasonable balance and no one, including you, is talking about that.

[Greyhound]

15. But they've conflated capital with debt. One of the fundamental flaws

that ensure this system will crash every few decades. We need to change that.

[EFerrari]

16. Agreed! n/t

[livelongandprosper]

2. The problem is there is no actual wealth in sight.

This country produces a lot of shit and carbon dioxide. We import everything else.

[SoCalDem]

4. 70% of our economy consists of us all paying each other to "service" us

and buying $2 plastic junk from China...with plastic:(

[whistle]

6. The Bullshit Meter is sounding like a Geiger counter on this one

[nadinbrzezinski]

7. Read this

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4099098

[arcadian]

8. No credit = no debt = money become worthless.

Money that isn't backed by anything only has one thing to sustain it and that is debt.

[dkofos]

9. And it could be thawed out just as easily.

[glowing]

10. I think that the Govt should become a bank.. let people borrow from the govt

Interest would make money for the govt and we wouldn't stall credit lines for businesses, college, car loans.. etc. Bailing out private banks is a joke... and right now they are all running around making themselves "too big to fail" so they can get their hands on the bail out money.. I don't like the plan they have..

[Greyhound]

13. Funny, that's what the founders had in mind. It is and has been the Congress' adamant

refusal to do their jobs that got us in this mess in the first place.

One of the primary reasons for the once a decade census, they need to know how much currency is required to keep the system liquid without causing inflation by injecting too much. But of course, their economic was based on production and debt was something to be avoided.

[Greyhound]

12. That part is actually true, unfortunately our (the world's) economy is based on debt, not product.

You are absolutely right, this must change, but in the short-term this is what we've got, a Ponzi scheme in lipstick.

(you like how I worked that lipstick reference in there?)