"At this point, it’s easier to understand why economists feel so defensive about challenges to the Myth of Barter, and why they keep telling the same old story even though most of them know it isn’t true. If what they are really describing is not how we ‘naturally’ behave but rather how we are taught to behave by the market—well who, nowadays, is doing most of the actual teaching? Primarily, economists. The question of barter cuts to the heart of not only what an economy is—most economists still insist that an economy is essentially a vast barter system, with money a mere tool (a position all the more peculiar now that the majority of economic transactions in the world have come to consist of playing around with money in one form or another) [10]—but also, the very status of economics: is it a science that describes of how humans actually behave, or prescriptive, a way of informing them how they should? (Remember, sciences generate hypothesis about the world that can be tested against the evidence and changed or abandoned if they don’t prove to predict what’s empirically there.)

Or is economics instead a technique of operating within a world that economists themselves have largely created? Or is it, as it appears for so many of the Austrians, a kind of faith, a revealed Truth embodied in the words of great prophets (such as Von Mises) who must, by definition be correct, and whose theories must be defended whatever empirical reality throws at them—even to the extent of generating imaginary unknown periods of history where something like what was originally described ‘must have’ taken place?"

"The folks at CreditSuisse have created a new figure making this point by re-ranking sovereigns according to credit risk based on this multifactor model. The upshot is that China, Germany, Switzerland, the U.S., Australia, Japan, and Canada lead the way in terms of least sovereign credit risk. Agree or disagree with the absolute levels from the model, the point stands that naive models of sovereign risk are mostly fodder for idiotic headline writers, not helpful standalone measures for assessing real risk."

"In 2008 and 2009 exports of debt (the toxic stuff plus the nominally non-toxic stuff (US Treasuries)), only accounted for 3%.

It is common practice to ignore exports of debt when calculating America’s balance of trade. But, conceptually, there is not much difference between selling a foreigner or a foreign government a toxic synthetic CDO (that blows up in his face) and selling him a ship-load of genetically engineered soya-beans (or melamine tainted milk).

The logic for leaving exports of debt out of the calculation is presumably that at some point in the future the CDO that was “sold” will need to be paid back, which will require funds to flow out of USA into the pockets of foreigners, who may then decide to exchange those dollars for something else."

"We can add the inadequate funding of unemployment compensation programs to the ever growing list of things that the crisis has revealed need to be fixed."

"It is common enough to look at debt as a percentage of GDP, DPI, etc. but that's so... impersonal. So here are a couple of (very scary) charts that look at things from a dollars per person perspective (click on charts to enlarge)."

"The preceding is such an important point. We became indebted, in large part, because of a structural imbalance in society, one that skewed incomes, redirected wealth, and encouraged companies and individuals to lever up instead of seeking out and earning higher incomes. At the same time, our unwillingness to say no to great society programs, without raising taxes to pay for them, meant that we became beholden to the bond market for funding ongoing operations, this creating an elevated base of required income to service our rising debt."

"Among the many inconvenient facts that Wilson leaves out is that present trends suggest that 40 to 50 percent of all persons with bachelor’s degrees in 2009 will eventually go on to graduate or professional school. Those debts can be enormous, and when one acknowledges the real chances that any individual with a B.A. will go on to grad school the “lifetime of debt” is indeed more “likely.”"

"I recently had a client apply for a credit card. She is a homemaker, with no personal income. The house she lives in is in her husband’s name. She would have asked for a $3,000 credit line, just to pay miscellaneous expenses and to establish some credit on her own. So the computer is told that her household income is $150,000; her mortgage/rent payment is zero. The fact is that her husband’s mortgage payment is $7,000 a month (which he got with a no income verification loan). She had a good credit score, but limited credit since she has only lived in this country for the last three years. The system gave her an approval for a $26,000 line of credit!"