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> <channel><title>Comments on: We Might Be Dead In The Long-Run, But What Do We Leave Our Children?</title> <atom:link href="http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/feed/" rel="self" type="application/rss+xml" /><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/</link> <description>Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control</description> <lastBuildDate>Sun, 27 May 2012 06:47:45 +0000</lastBuildDate> <sy:updatePeriod>hourly</sy:updatePeriod> <sy:updateFrequency>1</sy:updateFrequency> <generator>http://wordpress.org/?v=3.3.1</generator> <item><title>By: David Merkel</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27096</link> <dc:creator>David Merkel</dc:creator> <pubDate>Thu, 15 Jul 2010 08:49:35 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27096</guid> <description>So long as it does not push our government into insolvency, infrastructure spending is valuable to the degree that it facilitates productivity in the private economy.  But with overindebted governments, it does not work so well.  People question the promise of being paid back in similar purchasing power terms.</description> <content:encoded><![CDATA[<p>So long as it does not push our government into insolvency, infrastructure spending is valuable to the degree that it facilitates productivity in the private economy.  But with overindebted governments, it does not work so well.  People question the promise of being paid back in similar purchasing power terms.</p> ]]></content:encoded> </item> <item><title>By: The stickiest price : Invest My Money</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27095</link> <dc:creator>The stickiest price : Invest My Money</dc:creator> <pubDate>Thu, 15 Jul 2010 07:11:03 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27095</guid> <description>[...] have less rigid near substitutes called &#8220;equity&#8221;, macroprudential policy should heavily favor the latter. Put Trichet and Bernanke in a room together, and let &#8216;em figure it out. They&#8217;re [...]</description> <content:encoded><![CDATA[<p>[...] have less rigid near substitutes called &#8220;equity&#8221;, macroprudential policy should heavily favor the latter. Put Trichet and Bernanke in a room together, and let &#8216;em figure it out. They&#8217;re [...]</p> ]]></content:encoded> </item> <item><title>By: interfluidity &#187; The stickiest price</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27087</link> <dc:creator>interfluidity &#187; The stickiest price</dc:creator> <pubDate>Wed, 14 Jul 2010 21:05:32 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27087</guid> <description>[...] have less rigid near substitutes called &#8220;equity&#8221;, macroprudential policy should heavily favor the latter. Put Trichet and Bernanke in a room together, and let &#8216;em figure it out. They&#8217;re [...]</description> <content:encoded><![CDATA[<p>[...] have less rigid near substitutes called &#8220;equity&#8221;, macroprudential policy should heavily favor the latter. Put Trichet and Bernanke in a room together, and let &#8216;em figure it out. They&#8217;re [...]</p> ]]></content:encoded> </item> <item><title>By: Explorer</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27082</link> <dc:creator>Explorer</dc:creator> <pubDate>Wed, 14 Jul 2010 07:49:42 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27082</guid> <description>I agree with much of what you say however I do have a few criticisms if I may.
Your solution seems to ignore the basic macro-economic identities:
(S - I) + (M - X) = (G – T)
If imports and exports stay the same, private saving must equal government deficits.
Also you seem to have a bias against public investment.
Better roads, schools, bridges, ports, power grids, internet are all public goods that can lead to increases in productivity in the future.
If they are natural monopolies they are, in my view, better in public ownership.
They also provide a social good, but the US seems to have lost any desire to provide social goods. There is also a rising Gini co-efficient (on par with Mexico and China) and far less social mobility.
The time to build these is when labour is cheap, capacity is underutilised, interest rates are low and the private sector is repairing its balance sheet. I read an article from about 2003 about the age of bridges in the US. The last 10 years of consumerism have been to some extent at the expense of renewal of basic infrastructure like bridges, roads, public transport.
You also seem to reject modern monetary theory, that a sovereign issuer of its own currency that predominantly trades and borrows in that currency can spend without taxing or borrowing without inflation during times of what would otherwise be deflation such as extreme high unemployment and falling asset values for a large part of the private sector balance sheet.
I also think that you have causation of investment about face. Savings don&#039;t automatically lead to positive investment in real risk assets or activities (other than that they have to go somewhere, but can go to government bonds as they are doing now because demand has fallen and lending against assets or to business is risky because of the lack of demand caused by households (50 to 60% of the economy) de-leveraging).
The greatest economic social and political problem is that 16 to 20% (don&#039;t forget the non-counting of discouraged workers) of your working age civilian population can&#039;t get enough or even any work.
As households de-lever and business don&#039;t invest because of lack of demand and overcapacity, government expenditure on real infrastructure is the solution, particularly as the greatest unemployment is in construction and related fields.
Good luck with your own search for new and additional ventures!</description> <content:encoded><![CDATA[<p>I agree with much of what you say however I do have a few criticisms if I may.</p><p>Your solution seems to ignore the basic macro-economic identities:<br
/> (S &#8211; I) + (M &#8211; X) = (G – T)</p><p>If imports and exports stay the same, private saving must equal government deficits.</p><p>Also you seem to have a bias against public investment.</p><p>Better roads, schools, bridges, ports, power grids, internet are all public goods that can lead to increases in productivity in the future.</p><p>If they are natural monopolies they are, in my view, better in public ownership.</p><p>They also provide a social good, but the US seems to have lost any desire to provide social goods. There is also a rising Gini co-efficient (on par with Mexico and China) and far less social mobility.</p><p>The time to build these is when labour is cheap, capacity is underutilised, interest rates are low and the private sector is repairing its balance sheet. I read an article from about 2003 about the age of bridges in the US. The last 10 years of consumerism have been to some extent at the expense of renewal of basic infrastructure like bridges, roads, public transport.</p><p>You also seem to reject modern monetary theory, that a sovereign issuer of its own currency that predominantly trades and borrows in that currency can spend without taxing or borrowing without inflation during times of what would otherwise be deflation such as extreme high unemployment and falling asset values for a large part of the private sector balance sheet.</p><p>I also think that you have causation of investment about face. Savings don&#8217;t automatically lead to positive investment in real risk assets or activities (other than that they have to go somewhere, but can go to government bonds as they are doing now because demand has fallen and lending against assets or to business is risky because of the lack of demand caused by households (50 to 60% of the economy) de-leveraging).</p><p>The greatest economic social and political problem is that 16 to 20% (don&#8217;t forget the non-counting of discouraged workers) of your working age civilian population can&#8217;t get enough or even any work.</p><p>As households de-lever and business don&#8217;t invest because of lack of demand and overcapacity, government expenditure on real infrastructure is the solution, particularly as the greatest unemployment is in construction and related fields.</p><p>Good luck with your own search for new and additional ventures!</p> ]]></content:encoded> </item> <item><title>By: Evening Hot Links: Monkey Terrorists The Reformed Broker</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27081</link> <dc:creator>Evening Hot Links: Monkey Terrorists The Reformed Broker</dc:creator> <pubDate>Sun, 11 Jul 2010 20:26:35 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27081</guid> <description>[...] Creative destruction in a debt-crazy society is painful, but it&#039;s the only way forward.  (AlephBlog) [...]</description> <content:encoded><![CDATA[<p>[...] Creative destruction in a debt-crazy society is painful, but it&#039;s the only way forward.  (AlephBlog) [...]</p> ]]></content:encoded> </item> <item><title>By: Lord</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27080</link> <dc:creator>Lord</dc:creator> <pubDate>Sun, 11 Jul 2010 17:18:38 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27080</guid> <description>I am sympathetic to many of your arguments but the solution must be sufficient inflationary pressure to counteract deflationary pressure, not simply one or the other.  Depressions benefit no one, not even our children.  Also implicit in this is the belief we can choose to leave our children better off.  Whether we do or not, this may be beyond our power.  In the end, our children must recreate the world for themselves, whatever we do.</description> <content:encoded><![CDATA[<p>I am sympathetic to many of your arguments but the solution must be sufficient inflationary pressure to counteract deflationary pressure, not simply one or the other.  Depressions benefit no one, not even our children.  Also implicit in this is the belief we can choose to leave our children better off.  Whether we do or not, this may be beyond our power.  In the end, our children must recreate the world for themselves, whatever we do.</p> ]]></content:encoded> </item> <item><title>By: RedSt8r</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27079</link> <dc:creator>RedSt8r</dc:creator> <pubDate>Sun, 11 Jul 2010 15:55:18 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27079</guid> <description>@DM
I agree with your analysis and generally with your strategies (save #4) to rescue the economy. Would that the political class did as well. Unfortunately there are those who would oppose your cures and who do so for their own personal benefit.
For example, there are many who posit that there is no limit to government debt (Krugman comes to mind but I cannot claim this for certain although he continues to presss for more and more stimulus and deficit spending). Others have suggested that the government simply issue currency in lieu of debt (which immediately leads to your strategy #4) claiming that printing money is no less inflationary than deficit borrowing. At a minimum it avoids interest payments which will be no small matter to our children/grandchildren.
The great difficulty in achieving any of your strategies (save #4) is that the political class does not benefit from them (at least they haven&#039;t yet). When politicians are voted out of office because they follow egregious economic policies then there may be an opportunity to reverse these fallacious policies.</description> <content:encoded><![CDATA[<p>@DM<br
/> I agree with your analysis and generally with your strategies (save #4) to rescue the economy. Would that the political class did as well. Unfortunately there are those who would oppose your cures and who do so for their own personal benefit.</p><p>For example, there are many who posit that there is no limit to government debt (Krugman comes to mind but I cannot claim this for certain although he continues to presss for more and more stimulus and deficit spending). Others have suggested that the government simply issue currency in lieu of debt (which immediately leads to your strategy #4) claiming that printing money is no less inflationary than deficit borrowing. At a minimum it avoids interest payments which will be no small matter to our children/grandchildren.</p><p>The great difficulty in achieving any of your strategies (save #4) is that the political class does not benefit from them (at least they haven&#8217;t yet). When politicians are voted out of office because they follow egregious economic policies then there may be an opportunity to reverse these fallacious policies.</p> ]]></content:encoded> </item> <item><title>By: Sunday links: malinvestment musings Abnormal Returns</title><link>http://alephblog.com/2010/07/10/we-might-be-dead-in-the-long-run-but-what-do-we-leave-our-children/comment-page-1/#comment-27077</link> <dc:creator>Sunday links: malinvestment musings Abnormal Returns</dc:creator> <pubDate>Sun, 11 Jul 2010 11:29:29 +0000</pubDate> <guid
isPermaLink="false">http://alephblog.com/?p=2689#comment-27077</guid> <description>[...] David Merkel, &#8220;The thing is, we are not in a liquidity trap, as much as we are in a broken financial system.&#8221;  (Aleph Blog) [...]</description> <content:encoded><![CDATA[<p>[...] David Merkel, &#8220;The thing is, we are not in a liquidity trap, as much as we are in a broken financial system.&#8221;  (Aleph Blog) [...]</p> ]]></content:encoded> </item> </channel> </rss>
