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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: SouthFloridaGuy who wrote (92326)1/4/2009 3:31:34 PM
From: Casaubon  Read Replies (1) of 116555
 
It's a very good article, and I enjoyed it immensely. However, the article claims only two solutions are possible:
The only way to get out of the box is to pay down or default the debt.

IMO, there is a third possibility, which is not as a poisonous to the world economy; improved efficiency. By producing more for less, we will be able to pay down the staggering burden of previous consumption, with the windfall profits extracted from ongoing consumption. Thus if we can produce $1 dollar of goods for $0.90, the resultant $0.10 savings can be applied towards paying down debt, though it will be painfully slow unless the increased efficiencies can be extracted from massive economies (such as the energy industry).

Edit: oops of course that does fulfill the obligation of paying down the debt. I just wanted to point out a mechanism by which it could be achieved (rather than the dire tone implied by the author).
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