tag:blogger.com,1999:blog-7820485130017459619.post6396340583714330262..comments2023-10-24T01:46:47.151-07:00Comments on CynicusEconomicus: Government Borrowing Does not ExistUnknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-7820485130017459619.post-71117531169926747162011-09-21T12:46:20.916-07:002011-09-21T12:46:20.916-07:00Krugman doesnt quite understand and Keynes is out...Krugman doesnt quite understand and Keynes is out of date. <br />and you keep using the phrase Government Borrowing.... a currency sovereign government doesnt borrow.. it neither has money or needs money<br />Suggest you actually find out how the bond market works as wellAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-76044622586279058922011-09-11T09:19:00.797-07:002011-09-11T09:19:00.797-07:00If you think Krugman meant his alien invasion poin...If you think Krugman meant his alien invasion point seriously, I suggest you are very naïve. This was simply a colourful way of illustrating a technical point, namely that the multiplier works even of the expenditure which sparks of a particular “multiplier episode” is pointless.<br /><br />Keynes made exactly the same point when he said that an increase in GDP could come from employing people to dig holes in the ground and fill them up all day long. And no, Keynes did not seriously think the futile hole digging was a good idea. A mentally retarded child can work out that pointless hole digging and fake alien invasions are pretty stupid.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-500807053556124662011-09-07T16:56:22.471-07:002011-09-07T16:56:22.471-07:00"The same can be said of any improvement in p..."The same can be said of any improvement in productivity. In the very short term, the improvement may cost jobs, but will later produce more employment and greater wealth."<br /><br />Is this really true? I imagine that for the theoretical Invisible Hand to work, there has to be direct visibility between doing something and the consequent cost or profit, and I'm thinking that what may be assumed to be improvements in productivity may have hidden costs, or costs which do not appear connected to the activity, or costs that do not become apparent until many years into the future. I could think of any number of examples, such as intensively farmed and processed food leading to the general enfeeblement of the working population as they become addicted to cheap fast food and weight-related illnesses take hold years later. Or if new innovations in productivity require people to find work further afield, it ultimately costs society in broken families, divorce etc. <br /><br />I'm not saying that we should cling to nostalgic, inefficient methods to keep people in work artificially, but that I don't believe that the free market can predict or even recognise the hidden, or future, costs of each new supposed productivity improvement, and that even if it does, is quite happy to offload those costs onto the government and tax payer (which it would simultaneously claim it doesn't need). Also, I don't believe that the free market isn't capable of killing off its own customers in the long run, just for some short term profit.Lemmingnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-78607536595241603082011-09-05T07:33:43.350-07:002011-09-05T07:33:43.350-07:00On today's BBC lunchtime news the government&#...On today's BBC lunchtime news the government's home building policy was being discussed, our chancellor George Osborne wants a root and branch reform of the planning laws governing building throughout the UK.<br /><br />The present plans (apparently) consist of a thousand pages of legislation, the revised plans are to be reduced to fifty pages.<br /><br />It is acknowledged that Britain's housing availability is in crisis as demand for new homes far exceeds availability. It comes as no surprise to me as I have been banging on about it for years.<br /><br />Mass immigration plus a woefully inadequate home building programme year on year equals housing shortage crisis.<br /><br />Not exactly rocket science is it?<br /><br />Millions of new homes need to be built to keep pace with the exponential increase in population<br /><br />Leaving aside the environment debate and the NIMBY (not in my back yard) argument, Osborne is straining at the leash to start the project like yesterday.<br /><br />Osborne openly states that a huge housing project is just what the country needs to kick start the economy into a Brown like boom of the '90's.<br /><br />I've lost count of the number of times I've read here and elsewhere the question of where is Britain's future growth to come from?<br /><br />I've also lost count of the number of times my reply to the question has been the only future growth for Britain is continued mass immigration for ever.<br /><br />Cameron's government have obviously come to the same conclusion. Britain is to be concreted over. As an aside, nobody wants to mention what sort of infrastructure the project needs.<br /><br />Still it all sounds more plausible than inviting creatures from outer space. Hmmm, on second thoughts I dunno.<br /><br />We're doomed a'tell ye, we're doomed.<br /><br />Cynic I think this topic is worth a post all of its own. Where are all the jobs to come from?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-41596344540351059192011-09-03T19:43:42.689-07:002011-09-03T19:43:42.689-07:00"without thrift, where is the money for inves..."without thrift, where is the money for investment to come from? Without savings, where is the capital for investment?"<br /><br />Isn't this the usual fallacy of banking, that ban deposits are needed before banks can make loans ? Is the truth not that banks, when they see a viable opportunity, create a deposit of whatever size may be neccessary & solve the reserves problem after the fact ? <br /><br />Thus, we do not actually need a mythical pile of 'savings' before money can be invested in some hypothetical worthwhile project. The money to 'pay for it' can be /is created out of thin air. That's just how banks actually operate. <br /><br />The real problem is the percieved lack of worthwhile opportunities. For example, it used to be possible to pull together loans to finance some great new housing project. Now, not so much, because , well, who can now afford the deposit on a new house ? <br /><br />How about some scheme to make all new equipment 'oxone friendly ' or 'environmentally wonderful ' or whatever ? Well, firstly, even granting some mythical legislation to make such things compulsory, where will the new friendly stuff actually get made ? Ans : The Far East. So it won't boost employment here. <br /><br />So , how do you get round that ? Only one way. You legislate a level global playing field by charging tariffs on all imports to make up the difference between our 'environmentally kosher' / high wage regime & the Chinese 'environmentally reckless / low wage ' regime. <br /><br />Then the hypothetical jobs go ... well, here. If the world is headed for a global level playing field, then our living standards are going to be relentlessly heading downwards for a long long time, while the rest of the world 'catches up'. I imagine it would be better to manage our decline so that it happens slowly & smoothly rather than as the result of a series of pretty vertiginous sudden lurches downwards.<br /><br />So, trade tariffs it is then ? :-)<br /><br />Of course, what with the ratio of the amount of oil available per year per unit global population heading into a long term down trend, we may all meet when we in the West have descended to Chinese income levels rather than when they have all floated merrily up to ours. <br /><br />The only way out of *that* one, would seem to be .... um... hey how about *famine * on a global scale ?<br /><br />God this is depressing .chaingangcharliehttps://www.blogger.com/profile/04803774361542678154noreply@blogger.com