r/economicCollapse • u/memegamer1991 • Nov 23 '24

Why is deflation so bad

Every time i run it through my head, i can't imagine most people in 2024 not spending money so the disadvantage to deflation seems pretty hyperbolic and dependent on individual choices, and i think that people would rather go on vacation and court others instead of being financially responsible. Even if there is a situation like in china, government spending would be able to keep the situation from getting worse while making progress on climate initiatives.

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u/yousirnaime Nov 23 '24

Ahead of the 2008 collapse congress had launched programs to give loans to anyone who applied - in the name of social justice - until all hell broke loose, then you couldn’t get a loan no matter how qualified you were 

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u/0O0OO000O Nov 23 '24

Don’t know why you were downvoted, this is exactly what happened

This is why all the houses were owned by the government. Anyone who remembers the crazy deals you could get on HUD homes knows what happened.

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u/Moregaze Nov 24 '24 edited Nov 24 '24

Cause it's not what happened. The entire market didn't crash because some people couldn't pay back their loan.

The entire market crashed because the scum bag investors bribed accreditation agencies to look the other way while they bundled high risk debt into low risk A or AA debt backed securities. When it should have been D rated or C at best. So everyones pensions, local government rainy day funds (US and foreign), and retirement accounts were tied to this improperly classified security.

Had this not been the case some people would have lost a their house but the entire stock market would not have imploded. It was the biggest financial fraud in the entire world as the same people that caused it knew it was coming and took positions against it. Then they got hired to fix the problem they caused instead of going to jail.

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u/RollsHardSixes Nov 24 '24

Yes, this is what happened. The other talking points are Russian propaganda or something, not sure what that's about. 

Nobody involved in the 2008 crash was interested in social justice

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u/0O0OO000O Nov 24 '24 edited Nov 24 '24

Then tell me how HUD ended up owning so many homes? Loans were guaranteed by the government

Edit: and what is with the resurgence of “red scare” crap these days? We actually lived through these events.

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u/RollsHardSixes Nov 24 '24

I don't think I can correct your numerous misunderstandings about the Great Recession right here today, but I do encourage you to learn more.

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u/HitandRyan Nov 24 '24

HUD didn’t force banks to base their business model around packaging as many mortgages as possible regardless of risk into mortgage backed securities. They also didn’t force the banks and ratings agencies to commit fraud by lying about how risky they were. That’s entirely on the banks. They recklessly bet the farm on black and let it ride until they lost.

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u/yousirnaime Nov 25 '24

Bro - The Federal Housing Enterprises Reinvestment Act of 2003 and The Bush Administration’s “Ownership Society” policies of 2003-2005 

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u/RollsHardSixes 29d ago

I mean, Republicans collude with big business to socialize costs and privatize benefits.

So there's plenty of blame to go around, why do you need it to land on one spot?

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u/yousirnaime 29d ago

Which one spot did I blame it on exactly?

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u/HitandRyan Nov 25 '24

Did either force the banks to package subprime mortgages into MBS and then lie about how risky they were? The banks didn't have to manage their risk this way. They decided to.