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Pete Murphy

A great post as usual, Elaine!

I see corporations playing a big role in driving this debt binge. Any corporation worth its salt (in the eyes of stockholders and peer companies) has stated goals of sustaining long-term profit growth of at least 10% per year. Since this is well above the combined rates of inflation and population growth in the U.S., achieving such a goal over the long term is clearly impossible. Nevertheless, a lot of big performance awards are linked directly to achieving such a goal. As a result, executives will resort to any trick in their bag to make it happen. One of these tricks has been to lobby the government for banking deregulation, making it easier and easier for people to go more deeply into debt to buy their products and prop up their total sales volume. And that's exactly what has happened.

What's the solution? I don't know, but for sure the government needs to come to a realization that its purpose is to serve the common good, and that the best interests of the common good may not always match the best interests of corporations. The government has clung too long to the adage that "what's good for Bull Moose Motors is good for the U.S.A." It needs to be suspicious of the motives of corporations, their lobbyists, their bought-and-paid for "think tanks" and their stooge economists. It's time to pay more attention to the more mundane matters of economics - the simple math of balancing our spending with revenues and balancing our imports with our exports.

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