What about fluffy bunnies?


Kid Pareene:

So my immodest proposal is simply this: Individuals and households in the bottom 99 percent who owe debt to any large financial institution that received federal government support during and after the 2008 crisis should see their debt forgiven. That would certainly stimulate the economy, as most people would suddenly find themselves with a great deal more money to spend on iPads (and food, and clothing, and housing, and healthcare). The debt can be forgiven by decree or if the government really wants to it can step in to pay it itself; I don’t much care either way. (Though it’d be nice to see it just wiped off the books, to enrage the banks.)


After that we can vote ourselves bread and circuses!

We already have a process to relieve people of consumer debt they can’t afford to pay. It’s called bankruptcy.

Banks don’t keep huge piles of money in their vaults, they loan it out. That’s why they can afford to pay interest on savings.

So if you wiped out all the debt, they would be unable to pay back their depositors. They would simply go out of business, leaving taxpayers holding the bag.


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37 Responses to What about fluffy bunnies?

  1. Mimi says:

    Comment from Thomas Paine in comments,
    It’s a great idea, but you may run into a problem with the Fifth Amendment, which forbids a “taking” from any “person” by the federal government. In this case, the courts would likely strike down any law “taking” claims from the “person” of corporate banks. States would not only have to face the Fifth Amendment, but also Article I, Section 10, which forbids states from impairing contracts, in this case the debtor’s agreement to pay debts. We already have a constitutionally permissible means of debtor relief: bankruptcy. So let’s repeal the god-awful bankruptcy “reform” act of 2005 that made it more difficult and more punishing for consumers to get rid of their debt.

    Bankruptcy reform would go a long way in solving some of the problems people have currently.

    • Mary says:

      And which Senator was THE strongest supporter of that 2005 Bankruptcy Law that totally screwed the middle class and helped the Big Boys?

      Chuck Schumer.

      True story.

  2. WMCB says:

    Oh, great. Yes, let’s just cause a huge financial crash, and the complete shutdown of the entire economy.

    What these idiots don’t seem to get is that you have to balance what’s fair with what is. It’s not a particularly pleasant reality that the large financial institutions are absolutely necessary to the country. Yes, it gives them leverage. And I don’t like that. But the fact that I don’t like it doesn’t make it not so. It’s like gravity. Gravity doesn’t give a shit if it’s fair that you fall – step off the ledge and you will.

    And I just love this:

    or if the government really wants to it can step in to pay it itself;

    With what? Seriously. Are they not aware that the govt does not posses one thin dime that isn’t extracted from some other citizen’s pocket? Cancel the debts of an entire country, and pull it all out of WHOSE pockets? Don’t say the rich, because there aren’t enough of them to even make a DENT in that amount of money, even if you confiscated it all.

    This protest is turning into the white liberal college student version of “Obama’s gonna pay my mortgage and my car…. out of his stash!” , and it’s just as childish and laughable as that woman was in 2008.

    • votermom says:

      Are they not aware that the govt does not posses one thin dime that isn’t extracted from some other citizen’s pocket?

      I think they are going by the theory that the US has a sovereign currency and can therefore print as much money as it wants. They call it MMT – Modern Monetary Theory. The guys at corrente like it – but no matter how many times they explain it to me I really can’t understand how they think that is going to work. I even asked point blank — then what happens when the rest of the world dumps US$ because there is such a glut of it – they assure me it will still work.
      It must be a mental failure in me. My brain is just not sophisticated enough to grasp it.

      • myiq2xu says:

        Is that the one where the government just prints more money and uses it to pay off the deficit?

        • ralphb says:

          Well, the Fed did it with $16 trillion in liquidity to prop up the world’s banks. In case no one noticed, that’s more than our fucking national debt.

        • WMCB says:

          Either prints or sells treasury bonds forever. They never seem to have an answer to “what happens if the rest of the world decides not to, or is unable to buy?” They also cannot answer “What happens when just the interest we are paying on those bonds exceeds total GDP?”

        • votermom says:

          Is that the one where the government just prints more money and uses it to pay off the deficit?

          Yup.

        • Dario says:

          Too much printing of money causes inflation. We just saw how Bernanke with the QE2 brought inflation up because we were close to a persistent deflation. Inflation is very bad for savers because the purchasing power of money disappears. Worse, inflation as well as deflation influence expectations that more of the same is in the horizon, and it snowballs. That’s why Volcker put our economy into spasm back in the 80s to get us away from the inflation spiral. We don’t want inflation or deflation. We want a stable currency.

        • ralphb says:

          In actuality a very small amount of inflation is about as good as it gets. A completely stable currency would mean stagnation.

        • votermom says:

          But you see all these arguments are old mainstream economic thinking. MMT is the new way to think about money. Because it’s new it’s hard to grasp. (It has nothing to do with all the word fog that comes up whenever someone tries to explain it.)
          It’s a theory that is sure to work. In theory.

          There’s even an MMT wiki
          http://mmtwiki.org/wiki/Main_Page

        • Three Wickets says:

          When MMTers talk about printing money, they mean something different than the loose meaning of printing money used by markets. The latter meaning relates to tools and facilities the Federal Reserve uses to expand the total leveraged capital stock in the economy. Purist MMTers want nothing to do with leverage or credit or IOUs, they want to print and distribute and trade only actual hard treasury bills, currency notes and coins.

          For perspective, the current size of the pure monetary base in our economy (currency in circulation and in bank vaults, minimum and excess reserve deposits at the Fed) total around $2.6 trillion. The total value of all assets in our economy total $75 trillion give or take. What are we going to do…erase the value of all these assets and start from scratch…or actually print the difference in new currency. There would be a little problem with inflation probably. But no worries. When that happened in the Wiemar Republic or North Korea, their leaders instituted strict price controls and shot or beheaded anyone who ignored the controls. Quite the Arcadia.

        • Three Wickets says:

          Put another way, the world of perpetual money printing by government treasury that MMTers wish for would result in an economy with permanent spiraling inflation. No incentive to save or make long term investments, because money is always losing value, only incentive to spend the money you do have faster. Even Marx wouldn’t support such a regime. It is such a ridiculous strawman that MMT proponents actually undermine the worthy aspects of Keynesian economics which imo we do need in this contracting economy. If I were an advocate for traditional Republican inflation-obsessed supply-side economic thinking (which I’m not generally), I would point to MMTers as evidence of how spacey, unrealistic and irresponsible leftist economic thinking can become. Even someone as demand-side lefty on general economic policy as Krugman keeps his distance from MMTers.

  3. votermom says:

    That’s quite possibly the dumbest idea I have ever seen on a so-called magazine.
    I don’t think I have ever blogged anything as dumb as that. Therefore I demand that Salon hire me to replace Kid Pareene.
    I am going to head over to their office with a big sign and sit in the lobby until they do what I want.

  4. ralphb says:

    I liked this comment at the occupy site in response to their demands…

    hahahahahahahaha..I demand a new saddle for my Unicorn

  5. WMCB says:

    Oh, and fucking idiot college students?

    You know those banks and other institutions that you want to bankrupt overnight? Those evil evil corporations?

    That’s where workers’ pensions are invested. That’s where your mom and dad’s 401k is invested. And your college trust. All of those millions and millions of average Americans going about their business and saving for retirement are what’s called shareholders, see. I know it’s difficult for you to believe, but the assets of an evil corporation don’t just consist of a big fat overpaid CEO and 12 board members.

    Anyone in this country who has any kind of 401k or IRA or any savings at all are parts of those “corporate persons” that you want to smash like a fucking child, with no awareness whatsoever of what you are doing, or what the result will be. At least the real communist revolutionaries knew they wanted to utterly destroy their current country. You idiots aren’t even that, just clueless.

    So go home, and learn something about the way the world works before you put forth your giddy unicorns-and-bongos “manifestos”

    Otherwise, kiss my petit bourgeois ass, you morons.

  6. DandyTiger says:

    Just when you think people can’t get any dumber, they surprise you.

  7. Dario says:

    The Big Picture takes a few photos of Okotoberfest 2011. Fun, fun, fun

    http://www.boston.com/bigpicture/2011/10/oktoberfest_2011.html

  8. yttik says:

    “They would simply go out of business, leaving taxpayers holding the bag.”

    What kind of surprises me is how some people don’t seem to understand that it’s OUR money. The bailouts? Our money. The money in banks? Our money. The student loans you took out? Our money. There is no secret money tree where all this cash comes from. It comes from people working and investing. Or else it comes from the Gov taking money from people working and investing.

    They want to shut down wall street, well my measly and sad little 401K is sitting there with hundreds of thousands of other people’s. That’s OUR money. They want to shut down banks, OUR money is in that bank. They want to spent a few trillion in infrastructure, well, that’s OUR money.

    • WMCB says:

      Yup. And now I’m going to go all tinfoil hat. I saw that one of the websites set up 2 months ago for this protest was set up by one Vladimir Teichberg.

      http://nycga.cc/

      So I googled. Well, according to linked in, there is one Vladimir Teichberg (not a common name) who is a NY trader for HSBC, a bank.

      http://www.linkedin.com/pub/vladimir-teichberg/6/192/634

      Gee, could there be some attempt to tank some banking stocks here, short them on the way down, and make piles of money? Remember, the Big Boyz like Soros and his cronies MAKE money on tanking markets and unrest. Everyone’s 401k’s flow right into their pockets as they deliberately make their bets on markets going down, then help make it happen. Goldman and hedge funds and others made a BUNDLE on the 2008 crash.

      • yttik says:

        These protesters are trying to make wall street and capitalism the enemy, the main focus, while completely disregarding the role of politicians. They want to believe that if you are poor and unemployed, it’s not because of Obama’s policies, it’s because Wall Street is greedy and capitalism sucks.

        Who benefits if the people’s anger and attention can be diverted away from the politicians who caused this mess? Naturally the guy who can’t run on his record or the condition of the country right now. His only option for re-election is to make sure the people blame somebody or something else for the current economic conditions.

        • Mary says:

          I think they should DEMAND that Obama spend that $1 billion re-election fund on them and their debts.

          Cuz, ya know , he CARES. (Yes, snark)

  9. r u reddy says:

    I am a total layman about financial affairs, but isn’t our banking system a “fractional reserve” system? Doesn’t that mean that any bank is legally authorised to lend credit amounting to many times the actual value of peoples’ money deposited in that bank? In other words, the “reserves” need only be a fraction of the credit lent? So how much of the credit lent is deposits which were not retained in “reserve” and how much of the credit lent is purely imaginary money– monetized credit, if you will– which can only be paid back with
    real money earned by real work? Isn’t the recently- popped real estate bubble due to the emission of more credit than could possibly be matched by real money or real value? Isn’t that why house prices have fallen partway back to the normal level they should never have risen from to begin with?

    About bankruptcy, wasn’t that all changed with the bankruptcy reform act of 1990-whenever? Isn’t a feature of that act that student debt may not be discharged in bankruptcy under any circumstance whatsoever?

    Are the protests a diversion? Perhaps they could be viewed as targetting the right people . . . the people who own the government and for whom Obama works. I saw a comment on another blog that the reason the protesters didn’t go to Washington is that they are tired of dealing with the Department of Customer Relations and they have decided to go to the Boss’s Office instead. Also, Riverdaughter has been attending the Occupy Wall Street Assembly and notes that it
    is not just (or even largely) students. Here is the link:

    • r u reddy says:

      Right . . . here is the link.
      http://riverdaughter.wordpress.com/2011/10/05/occupywallstreet-live-blog/#comments

      (Ugly icons get in the way).

      • myiq2xu says:

        Riverdaughter?

        Hmmm, that name seems familiar.

        • r u reddy says:

          I have begun reading The Confluence ever since Monster from the Id recommended it to us Hullabaloo readers. I have stopped reading Hullabaloo ever since it became clear that I (and others) are under some kind of undisclosed stealth-ban. “Don’t read where you can’t comment” should apply in cases like that.

          I don’t have a whole lot of time/energy to spend on ban-busting experiments, but at some point I will see just how wide a circle-of-related-computers the ban applies to.

        • myiq2xu says:

          Most of the people here are TC alumni

        • r u reddy says:

          I first became aware of Crawdad Hole when somebody wrote a comment on Hullabaloo about how Crawdad Hole was tracking the suspicious emergence of apparent stealth erasures of comments just after David Atkins was invited onto Hullabaloo. I clicked onto the source given for the article on the erasure of comments by Vast Left and then others. I hope Crawdad Hole spares further moments now and again to keep tracking stealth-banning at Hullabaloo . . . inviting people’s stories of same, and etc. Even though I realize that you-all have better things to do with the majority of your time and attention and bandwidth.

          It is good that so many people read TC and CH at the same time, given that the two blogs have deeply different views on certain things and stuff. Such dynamic tension helps stretch and strengthen the brain.

        • Three Wickets says:

          Didn’t realize the CH had a prevailing view on stuff. The allowance for range of views and debate is what distinguishes this place, imho. 🙂

  10. Three Wickets says:

    Junior Pareene now doing the economic thinking for Salon. Idiotic and pathetic. He doesn’t know what he’s talking about. His strawman idea would make North Korea look like rabidly successful capitalists. Why does anyone read Salon.

    • WMCB says:

      Why does anyone read Salon.

      Because it cheers us up to have something to mock?

    • Karma says:

      Didn’t some people actually pay for it too?

    • r u reddy says:

      I still read Salon now and again. They sometimes have interesting articles. Unfortunately, they don’t have an easy way to go back and find particular interesting articles from years ago.

      I remember reading a Salon article about a California inventor who had done wind-tunnel and computer airflow simulation tests to see what kind of metal add-on fins could be attached to a car’s trunk to make the airflow off the back of the car more laminar and less turbulent. He reported several mpg-improvement success with the couple kinds of cars he had designed trunk-wings for. I wish I could find that article again without several days of brute-force reading of everything going back years on Salon. I will not do that.

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