under a state sponsored unitary dome " fully socialized commanding heights" economy
could the cyclops suffice ......why of course
the unitary dome has no default or delinquency rate barrier to net credit flows
in essence if the credit system simply absorbs the fluxing rate of default
and of delinquency
ie can not and therefore will not seize up
where's the basis for a prolonged self building contraction ?
the transfer system could continue as b4
simply now allowing an increase of risk assumption
up to a reckless infusion of high risk loans to maintain effective demand
could ..is of course not..... should ....
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this clearly shows the liquidity trap is simply a credit tra
ie the loans that could power a return to full employment
simply will not be made given the existing institutional arrangements
ie private for profit credit provision
given a sudden partially self fulfilling jolt to the default and delinquency rates
a self building slow down in additional aggregate outstanding loan value
...even contraction of the value of the loans outstanding can occur
and not self reverse because the new higher levels of expected default and delinquency
themselves will not reverse
as this impacts demand firms and households will adjust "down " current spending
etc etc
none of this follows by a credit system designed to operate not pro cyclically
but counter cyclically and not simply that
but recognize a systemic higher default rate and growing delinquencvy rate is
precisely the grounds for increasing the net flow of credit
