What happened ca 1984 to cause the sudden acceleration in debt? Debt load was reasonably constant from about 1948 to 1984 (more so in the Phillips chart, which appears to be based on slightly different measures) then suddenly skyrocketed in 1984, softening somewhat during the Clinton administration, then taking off again under Bush II.

Clearly, while the American public was complicit in this, it was not due purely to a change in public attitudes towards debt, since attitudes do not change that rapidly. Obviously there was some change in law and/or policy that made the difference (and which un-made the difference during the Clinton years).

It appears that the “Alternative Mortgage Parity Act of 1982″ may be part of the equation, but it doesn’t seem to be the major factor. And the breakdown of Bretton Woods may have changed the propensity to lend of the Chinese and Saudis, but why would that change have reversed itself under Clinton?

What is clear is that the “Miracle of Reaganomics” was no miracle, just a massive Ponzi scheme that is now crashing down around us. Is it possible that simply lowering tax rates led to the debt bubble? Or was Fed policy somehow involved?

Seems to me that to avoid disaster ..possibly utter disaster …pragmatism is essential. But yes pragmatism could become socialism or communism or…the boundaries of these ideologies, as practiced, have become so blurred…

Do we need a new ideology? Any new Marx’s or Smith’s or…out there in cyber space??? more than likely I’d guess perhaps Juan is one of them.

In my opinion anyway there are some people at any given point on the political spectrum who have a least some clues. Picking the ones who have the right clues for the day is the tricky bit.

What we disagree over is what is right, and what will work as a fix. Those between us on the political spectrum are clueless, and think that prosperity can be regained with a few tweaks.

The problem is much more difficult, if not impossible, when debt levels get this high. I want to see property rights respected, but that is not the way that the powers that be are heading.

Scott M — yes, that would be useful… finding the hidden accrual items could prove hard.

PM — there’s a phrase “Lied like a finance minister on the eve of the devaluation.” I have no idea on timing…

http://www.globalresearch.ca/index.php?context=va&aid=10696

This is a frightening scenario. Do you think their prognosis is feasible, and that the treasury could default by next summer, resulting in the creation of a “new dollar”, valued at pennies to the current dollar?

What would be especially helpful is a cross-border view of all-in and govt-sector indebtedness. What do Japan and Germany and other EU countries look like? I wonder if we all have the affliction of too much debt and not enough cash flow, and if the real lesson here is that with crippling debt loads, late-stage capitalism is a very slow-growth proposition.