[quote=Allan from Fallbrook]
SK: Well, my post was simply pointing out the fact that the SS trust fund was essentially stuffed with IOUs and headed for insolvency.
We’re basically hosed. As I pointed out in a previous post, this is a Balance Sheet recession and the debt overhang will have to be dealt with before any serious positive motion begins.
This is why all the various central banks moves have been smacked in the face with the Law of Diminishing Returns and repeated Keynesian “pump-priming” has proved ineffectual at best (we’ve “spent” trillions and barely moved the needle.) Our politicians not only lack the will, they lack the right answers, too.[/quote]
Couple things.
I just think the IOU issue is not material to the discussion of solvency. The solvency issue is fixable relatively easily. Whether there is the political will to do so, remains to be seen.
If you’re talking about stimulus being the pump priming…i’m reasonably sure that the fiscal stimulus didn’t meet what Keynes would have suggested. I’m going back pretty far, but i’m pretty sure that expansion of money supply isn’t a primary stimulus in keynesian economics, and suggests that it will be mostly ineffective during depression and deep recession. If I remember correctly, then it certainly hasn’t been proved wrong.
