Alternative Visions - Price Instability, NY Rent Control Fight, and Escalating US Deficits & Debt
Dr. Rasmus challenges the mainstream economic theory that prices serve to stabilize the economy. How financial asset prices, oil prices, bonds, etc. are now driving price volatility that leads to more general economic instability and recessions. Prices for financial assets are the main driver of goods prices, wages (labor prices), interest rates (money prices), commodities, etc. How global oil deflation, now re-emerging after last year’s 40% decline, is a key factor in Trump neocons’ effort to provoke Iran and recent events in the strait of Hormuz. Rasmus concludes with latest figures on US deficit projections for 2019, now around $1.3 trillion, and US government and total debt trends and projections for government, corporate, farm, household, and related debt—now around $60 trillion and approaching $80 trillion by 2028. How deficits and debt do matter for the economy, when they cannot be financed (i.e. repaid) when prices slow or decline due to financial markets and recessions. (Next week: Europe as basketcase of the global capitalist economy).
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