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Interesting graph showing voodoo economics of Ronald Reagan

Vince, that totally ignores politics. Germans wanted the mark to go to zero, as revenge against their enemies who were demanding reparitions. Politics in the USA isn't following that track currently, and I don't think it will short of us losing a major war.

[quote="John"]In 2008, I wrote the article, "One, Two, Three ... Infinity," in which I compared to the ever-increasing government spending plans to a book by George Gamow that I read in school in the 1950s. My use of that particular phrase was to convey the idea that American debt was on an exponential growth path that would not be stopped except by a major financial collapse and crisis. The point of that article is that each bailout would fail, and the next one would have to be larger, and would achieve a smaller effect. (This is the Law of Diminishing Returns.) As the above graph shows, that exponential growth path has continued since 2008, and it will continue until there is a crisis so huge, that total financial collapse occurs. [/quote]

When a government can print its own money, the only thing that puts a limit on their spending is for people to stop accepting that money. The transition from accepting that money to not accepting that money is called "hyperinflation". This in the US dollar is the "crisis so huge, that total financial collapse occurs". A deflation where the dollar became 2% more valuable is not a total collapse. When the dollar becomes worthless, that is a total collapse.

http://pair.offshore.ai/38yearcycle/#hyperinflation

Graph would look pretty much the same if it went from 1870 to 1920. Post 1932 it needs to have an inflation adjustment of some kind as well, otherwise the debt is greatly magnified by the decline in the value of a dollar.

Apart from that caveat though, the debt of course cannot increase exponentially, and it doesn't, the curve rolls over and flattens for a while before rising again. The big difference between now and former eras is that debt is supposed to be paid for by the twin engines of increased GDP and inflation, but neither of those are running right now.

9-Sep-11 World View -- One, Two, Three ... Infinity - Revisited

Iran's Mahmoud Ahmadinejad criticizes slaughter in Syria

[i][url=http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e110909#e110909]** 9-Sep-11 World View -- One, Two, Three ... Infinity - Revisited[/url]
** [url]http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e110909#e110909[/url][/i]



Contents:
#### World View - One, Two, Three ... Infinity - Revisited
Iran's Ahmadinejad criticizes slaughter in Syria
Greece's GDP fell by 7.3% in Q2 - more than expected
US investigates "specific, credible" terror threat for 9/11
One, Two, Three ... Infinity - Revisited
Generational split among Egypt's Bedouins in Sinai

Keys:
Generational Dynamics, Mahmoud Ahmadinejad, Iran, Syria,
Bashar al-Assad, Greece, bailout, infinity, public debt,
George Gamow, Herb Stein, Bedouins, Egypt, Sinai

[img]http://generationaldynamics.com/ww2010/g110908c.jpg[/img]