"Ed Huntress" wrote

You wouldn't have to worry about that. Despite the appeal of Tony's idea
(and it does sound appealing), dropping that much debt on individuals would
bring consumer spending to a screeching halt and drive us into the deepest
depression in American history.


Just a quibble, Ed: we, us, individual Americans, are _already_ the ones who
owe the money. We just go on living (and voting) _as_if_ we don't. Would an
explicit acknowledgement of that reality "bring consumer spending to a
screeching halt"? I doubt it. Debt is not a novel concept to those of us who
carry mortgages, car loans, or credit card balances. Would it change our
_voting_ patterns? I say yes, and I say it would be for the better. I have no
clue whether "we" would vote to tax ourselves more, or spend less tax money on
ourselves, mind you.


Something like 60% of the American economy is consumer spending. You don't
play around with that. It's very sensitive to peoples' projections of
personal income versus debt. We can handle a lot of debt but, if you go over
a threshhold that appears to be around $15,000 or so per person, excluding
home mortgages and cars, everybody stops spending. Ask any retailer. They
watch that number like hawks.


Another quibble: _all_ spending is, ultimately, "consumer spending". Of course
I understand the importance of the intermediate step, namely "capital spending"
or whatever you want to call it. Feasting on the seed corn is counterproductive
at one extreme, devoting _all_ your labor to building "labor-saving devices" is
counterproductive at the other extreme. A proper balance between the two
depends, at least in part, on how deep in hock you are -- or, as I claim, on
_knowing_ how deep in hock you are.

-- Tony P.