Home Topics in Depth Economics Trump's tax reform could tip America into recession and possibly serfdom

  • N2Doc (4806 posts)
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    Trump's tax reform could tip America into recession and possibly serfdom

    By Paul Gambles, managing partner at MBMG Group

    A breeding ground for the next Great Depression now exists.

    In simple terms a depression is a recession that begins at a time when there are extreme levels of private-sector debt (and in consequence generally also an over-leveraged, acutely fragile banking system and stratospheric asset prices).

    According to the Bank of International Settlements, the relative level of private debt today – whether in global aggregate, in the highly-financialized U.K., and U.S. or in the seven countries highlighted by my colleague Steve Keen, the chief economist at IDEA Economics, as most vulnerable to a debt crisis – is comparable to and, in many cases, worse than in the late-1920s.

    Therefore, we should all be desperately seeking to “avoid” triggering a re-run of the 1930s (“avoid” in the standard sense and not the political vernacular where it means “delay for a four to five-year term of office”).


    Gracchus, glinda, liberal at heart and 4 othersmmonk, 7wo7rees, disillusioned73, ZimInSeattle like this
    "But nothing ever changes unless there's some pain" - Tears For Fears "Goodnight Song"

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6 replies
  • mmonk (1872 posts)
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    1. Surprisingly good article from CNBC.

  • FanBoy (7985 posts)
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    2. actually, a recession/depression is what happens when money tightens

    = a cascade of effects leading to slowdown (bank/business or government policy being the root cause).

    most people are still in ‘depression’ from the last downturn — except for the top 10% who are doing just fine, f**k ’em all.  they got bailed out of their debt and offloaded it onto everyone else.

    • liberal at heart (1088 posts)
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      3. that's exactly what happened. The 1% offloaded their debt onto us.

      They get the taxpayers to pay their debt and they get all the new income and tax cuts. This is not sustainable. This will come crashing down around all of us. The question is the next time the 1% demand the taxpayers bail them out again, will the American people finally rise up and fight? 2008 was a wake up call for many. Many lost their homes and went years without work. If that happens again, Wall Street may not get the conciliation they are hoping for from the American people.

      • FanBoy (7985 posts)
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        4. yes, and no accident either. planned, aided and abetted.

  • Mom Cat (14850 posts)
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    5. We already have serfdom. It is called prison labor!

         NEVER FORGET      BERNIE WON!          
  • Gracchus (1257 posts)
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    6. The rich now have so much money they literally don't know what to do with it.

    So they will engage in speculative activities that eventually cause financial meltdowns. Ordinary people are swimming in debt because they have not seen a wage increase in 40 years and had to load up on debt to maintain their purchasing power.

    Absolutely no lessons were learned from the last recession. The elites got their recovery and are back to their usual shenanigans while the bottom 90% saw no recovery and are probably worse off than they were in 2007-2008.