[lbo-talk] silver lining?

[dredmond at efn.org]

> On Apr 24, 2009, at 4:44 PM, SA wrote:
>
> but I just looked up some stats on the Japan case. The only thing that
> kept their economy from suffering a worse depression than the 1930's US
> was the massive deficits they ran. But those deficits increased Japan's
> public debt as a share of GDP by 70 percentage points over 15 years.

It's also worth remembering that Japan never had a problem with private
sector debt, which dropped from about 105% of GDP in 1990 to a little
above 90% today.

The problem facing Geithner's neoliberal resurrection crew is that US
private debt went from 150% of GDP in 1980 to 280% (not a typo, we're
talking about a debt mountain almost three times GDP) today. Swapping
T-bills for selected bad debts may save a few well-connected banksters,
but it won't restart the economy. Instead, it will produce zombie debts.
As Lionel put it in Peter Jackson's wickedly funny, anti-Thatcherite
zombie thriller "Braindead" (1992, released as "Dead Alive" in the US):
"They're not dead exactly, they're just... sort of rotting."

-- DRR