A New Era of Deflation Is Officially Upon Us

[Yavin4]

We're heading down a deflationary downard spiral where 10% UE will start to feel like full employment. Why? Well, we're in a demand crisis. Without jobs, lack of credit, and falling housing values, the American consumer is not buying. Concurrently, businesses are still cutting jobs and not hiring. The only entity that can reverse this is massive federal stimulus which would create jobs in the interim and gets the ball rolling. However, with the new congress coming in, there's no hope for any additional federal stimulus. In fact, we're going to see cuts from the federal government.

Deflation is inevitable at this point. We're going to see higher and higher UE and business and government shed workers. We're going to see less and less demand as consumers cut back because of layoffs and less money which will lead to higher UE. A deflationary death spiral is here.

How can you survive? Cut your expenses as much as possible in particular your housing expenses. Save your money as much as possible. It's imperative to have as much money as possible. Be prepared for being UE. You may lose your job at any moment for any reason. Don't be traumatized when it happens. Be prepared.

[raccoon]

1. Wake me up when it's over. nt

[wisteria]

2. Sounds awful, sorry, but i hope you are wrong. n/t

[tavalon]

3. We've got two months of a lame duck Congress

They need to do the right thing. Am I holding my breath that someone, somewhere will tell them what the right thing is. No, not really.

[MannyGoldstein]

6. They'll be slashing Social Security

and that's about it.

[tavalon]

9. No they won't

But they might not be doing much at all and that's wrong. We have a Supreme Court Justice to impeach. We have stimulus to get passed. I don't feel like going through a depression.

We have Hoovervilles to organize. Last night was a clarion call to organize against anyone who isn't for the American people. Did you hear it? I did.

[cascadiance]

11. If the Dems do that it will be THE END of the Democratic Party!

Russ Feingold and Grayson would use that as a good reason to start a new one for 2012 with Bernie Sanders, etc. running. No f'ing more!

The Dems that are going out (and the ones still in) that want to have any kind of political future should use this lame duck session as an opportunity to pass through legislation targeting their base and the welfare of the American people and pass it in a way that a new Senate with hopefully no filibuster blockage could pass it for Obama to sign early in 2011. If the voter sees that the only useful legislation came from a Democratic House passing to a "no obstacle" Democratic Senate signed by a Democratic president, it might be the recipe to restore that in 2012. But if they instead go to try and slash social security, the Democratic base will realize that those "representing" them don't give a rat's ass about them, and will leave the party in droves for 2012. If they do this this early when the base is still mad and dispirited, it will get this new party started that much sooner before 2012.

Slashing social security is the Democratic Party committing suicide. Perhaps that is the goal of some of the outgoing blue dogs, but we should take note of who they are and never allow them to represent us again.

[Donnachaidh]

4. don't be traumatized when it happens? Are you f*cking KIDDING me?

Seriously, there are people who are just creeping by NOW. My DH was *underemployed* almost two YEARS. If it happened again to us? And worse -- if more people get a double bang of loss of jobs? I'm scared shitless about what my neighbors would do.

[seabeyond]

8. hear ya... and this is the fear that led to the election we jsut had. it is world wide

but obama is suppose to fix it all, yesterday.

it is tough. i am eyeing my savings now.... to cover living increases.

[Yavin4]

10. It's Going to Happen. There's No Stopping It Now.

Back in the early 2000s, I called the collapse, and I even gave a year, 2006. I was a year too early, but better early than late. I warned people back then. See this exchange:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x986336

(Read my post at #14).


Now, today, I am telling you that we're headed for a deflationary death spiral.

[katnapped]

5. Correction

Companies are most definitely still creating jobs....in China.

Expect the newly emboldened GOP to start pushing to cut the minimum wage to zero ("hey you wanna job or no job?")

[seabeyond]

7. thanks for info. i was listening to the cuts in britian. what they are proposing in u.s. austerity

i hear it is absolutely the wrong move and the problems that will come. and hopefully u.s. does not go that route. though i am a fiscal horder.... and would love for u.s. to cute spending all over the place, sounds like the wrong move.

[deutsey]

12. The 20th century was known as the progressive century in America

The 21st century, I'm afraid, will probably become known as the regressive century.