When there's deflation, it means that although most markets are shrinking and people have less to spend, the … - Michael Hudson

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The contrasts between what is spent today to educate a child in the poorest New York City neighborhoods, where teacher salaries are often even lower than the city averages, and spending levels in the wealthiest suburban areas are daunting challenges to any hope New Yorkers might retain that even semblances of fairness still prevail.

Michael Hudson

When there's deflation, it means that although most markets are shrinking and people have less to spend, the 1% that hold the 99% in debt are getting all the growth in wealth and income. Deflation means that income is being transferred to the 1%, that is, to the creditors and property owners.

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We go forward with our heads held high, but look back and remember where we come from.

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What do the 5%, or the 1% actually use their money for? They lend it back to the economy at large, they load it down with debt. They make their money by lending to the bottom 95%, or the bottom 99%. When you give them more after-tax income, it enables them to buy even more control of government, even more control of election campaigns. They're not going to spend this money back into the goods-and-services economy.

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The one sure mark of a con, though, is the promise of free money.

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So we are in for years of debt deflation. That means that people have to pay so much debt service for mortgages, credit cards, student loans, bank loans and other obligations that they have less to spend on goods and services. So markets shrink. New investment and employment fall off, and the economy is falls into a downward spiral.

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The most serious problems lie in the financial sphere, where the economy's debt overhead has grown more rapidly than the 'real' economy's ability to carry this debt. [. . . ] The essence of the global financial bubble is that savings are diverted to inflate the stock market, bond market and real estate prices rather than to build new factories and employ more labor.

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