The government and the private sector can't save at the same time, sorry. (debt, tax)
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If both the public and private sector attempted to de-leverage simultaneously we would be in a world of hurt. You cannot force individuals or corporations to spend. That leaves government, no matter how unpleasant that may be!
i brought this up in another thread . as maynard keyes said if we were a nation of savers and everyone saved then the economy would collapse under its own weight as we need spending to creat jobs.
^^Right now we have too many debtors & the economy is collapsing under its own weight. In other words, it’s the same sh*t either way!
Real savings create a kind of wealth effect, which in turn generates stable spending. The problem is the financial apparatus needs/wants unstable, perpetual spending regardless of the health of the spender.
As Philip T implied(?): Use taxes to regulate the hoarding of savers. This includes ALL types of savings & ALL types of people.
Last edited by DSOs; 10-24-2012 at 12:41 PM..
Reason: italics, other
It depends on the savings rate really.We have often has savings rate at 8% while governamnt spoent much less per centage of GDP and still a good econmy from growth.Its all i the balance and certainylk we have seen both individual lack of savings goig inot high debt whil;e governamnt has doen the same.Look at where that has brought us and even worse where it has brought so mnay european countries.Alot fo governamnt spending is purely consumptive.Once governamknt comnsumes a large proition of GDP then you have what greece is facing.
i brought this up in another thread . as maynard keyes said if we were a nation of savers and everyone saved then the economy would collapse under its own weight as we need spending to creat jobs.
Indeed. What if two people were stranded on an island and "saved"? That would mean they refused to trade with each other
If there were too much in circulation, just tax it back out.
As usual the only one who has any idea what is going on.
I'll never understand people who say we print money and go into debt. Have they ever once wondered why anyone who could print money would go into debt? We don't have a "debt". We print money.
If both the public and private sector attempted to de-leverage simultaneously we would be in a world of hurt. You cannot force individuals or corporations to spend. That leaves government, no matter how unpleasant that may be!
I haven't seen nay deleveraging by government except for states and local government. Certainly not by federal govenmentt.I the end its no different than someone who has unsustainable debt whichmakes growth almost impossible. Add to that policies that no one understands or know what the future holds.Whta we see now is the non-returns of massive increases in government.The Greek solution of spending your way out of debt by governant spending clearly doesn't work.
I haven't seen nay deleveraging by government except for states and local government. Certainly not by federal govenmentt.I the end its no different than someone who has unsustainable debt whichmakes growth almost impossible. Add to that policies that no one understands or know what the future holds.Whta we see now is the non-returns of massive increases in government.The Greek solution of spending your way out of debt by governant spending clearly doesn't work.
No offense but this paragraph is a train wreck of economic sense. First of all state and local governments are to be treated as the private sector is since they do not print money. They use money. They are nearly as fiscally constrained as a private enterprise. You absolutely obliterated the point of the graph that demonstrates that debts are someone's assets. No one can deleverage unless the Federal government prints money and goes into debt since their obligations are what make financial assets in the private sector. The only way to create a surplus is to cause the private sector to lose savings. (You be sure to add that good old time wisdom to save in that mathematical impossibility). The Greek comparison is a cliche`, and it was wrong when it was forged. The Greeks are not even printing their way out if debt since only the ECB can create money . Every sentence is wrong, heaped upon wrong.
Last edited by gwynedd1; 11-21-2012 at 06:40 PM..
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