tag:blogger.com,1999:blog-2098432983500045934.post2396832749628471303..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: The secretThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2098432983500045934.post-34342921885766024272016-08-13T05:19:24.831-04:002016-08-13T05:19:24.831-04:00"I was saying that how much money people had ..."I was saying that how much money people had in their wallets and how much debt people had are separate issues and mostly unrelated. I don't see any connection."<br /><br />If there is no connection between changes in base and changes in accumulated debt, then the things that drive changes in base are not the only consideration when we think about changes in the debt-per-dollar ratio. We need also to ask what drives the accumulation of debt.<br /><br />In broad sweep, our economic policies encourage spending (to encourage growth) and restrict money growth (to restrict inflation). But if we encourage spending while restricting money growth, we are encouraging credit use.<br /><br />We also have tax policies that reward the payment of interest. Essentially, people are encouraged by this to have large and fairly new mortgages. Businesses are encouraged to have debt rather than equity. Such policies encourage accumulation of debt.<br /><br />Our policies encourage credit use and debt accumulation. Our policies are the driving force behind the accumulation of debt. And we have no policy that discourages the accumulation of debt.<br /><br />Our policies are the driving force, pushing the debt-per-dollar ratio ever upward and toward crisis.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-12525820391381570042016-08-12T17:37:03.701-04:002016-08-12T17:37:03.701-04:00I was saying that how much money people had in the...I was saying that how much money people had in their wallets and how much debt people had are separate issues and mostly unrelated. I don't see any connection. <br /><br />I searched for the word base in your article and found nothing that suggested the article says anything at all about the monetary base.Jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-61457897559336594922016-08-12T17:01:34.242-04:002016-08-12T17:01:34.242-04:00"Prior to QE the amount of base money was pur..."Prior to QE the amount of base money was purely a matter<br />of how much cash the public wanted... It was entirely driven by what the public did in regard to keeping money in their wallets or in their bank accounts."<br /><br />So Jim, you are saying that how much base money people had <b>and how much debt people had</b> were purely a matter of preference. And that was true before the crisis, say from 1990 to 2007 when everybody was saying they wanted to *reduce* their debt?<br /><br />It was entirely personal preference? <a href="http://repec.umb.edu/RePEc/files/FisherDynamics.pdf" rel="nofollow">Fisher dynamics</a> played no part in it? And the relative scarcity of money (relative to debt) played no part?<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-77279449144412430702016-08-12T10:32:53.664-04:002016-08-12T10:32:53.664-04:00Prior to QE the amount of base money was purely a ...<br />Prior to QE the amount of base money was purely a matter<br />of how much cash the public wanted. <br /><br />Yes during the Depression the public didn't trust the banks and withdrew a lot of cash currency. Thus base money grew fast.<br /><br />And yes after the depression that trust in banks returned and some of the cash flowed back and then after that the demand for cash started to grow again. <br /><br />None of this has anything to do with any so-called monetary policy. It was entirely driven by what the public did in regard to keeping money in their wallets or in their bank accounts. <br /><br />Jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-3247502237684661342016-08-11T05:12:22.623-04:002016-08-11T05:12:22.623-04:00Arthurian monetarism
Arthurian monetarism<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com