tag:blogger.com,1999:blog-2098432983500045934.post3908401488031282289..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Inequality and debt (3): SRW: Inequality drives DebtThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2098432983500045934.post-9331434992884644222014-01-08T13:26:38.296-05:002014-01-08T13:26:38.296-05:00I just made a long and detailed response which eva...I just made a long and detailed response which evaporated into the ether when i tried to post it.<br /><br />If I didn't already have a head ache, I'd get drunk.<br /><br />Short version.<br /><br /><i>Clearly, debt growth after 1970 is consistently greater than it was before.<br /><br />Clearly, debt growth after 1960 is consistently greater than it was before.</i><br /><br />Detailed analysis [now lost] of the data shows these statements not to be correct.<br /><br />For debt to contribute to inequality, it has to inhibit wealth accumulation. There is some threshold below which it doesn't.<br /><br />But this will vary across income and prior wealth levels, so aggregated data might not give a true picture.<br /><br />At the very least, I'm going to go chew nails.<br /><br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-55541867886148159392014-01-08T04:49:20.382-05:002014-01-08T04:49:20.382-05:00Jazz: "Look at simple CMDEBT growth, no denom...Jazz: "Look at simple CMDEBT growth, no denominator.<br />http://research.stlouisfed.org/fred2/graph/?g=qHG<br />Clearly, debt growth after 1980 is consistently greater than before."<br /><br />Yeah, that's a good graph. Clearly, debt growth after 1975 is consistently greater than before.<br /><br />Clearly, debt growth after 1970 is consistently greater than it was before.<br /><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=qI5" rel="nofollow">Clearly</a>, debt growth after 1960 is consistently greater than it was before.<br /><br />//<br /><br />Jazz: "When I try to reproduce your graph 2, I get this:<br />http://research.stlouisfed.org/fred2/graph/?g=qHI<br />And then have to manually change the units on line B [GDP] from 'Change, billions of dollars' to 'Billions of dollars.'<br />The FRED math is done behind a curtain. I'm guessing something blows up in their algorithm when you go through these steps."<br /><br />You're guessing something blows up in their algorithm??<br /><br />When you choose "Change, billions of dollars" units for line A -- CMDEBT -- FRED assumes you want to continue selecting those units for the next data you add to the graph (your line B). This is consistent FRED behavior, and has been for quite some time. I find this behavior quite irritating, actually. It makes it easy to get the wrong graph, as you did.<br /><br />BTW you can get to the FRED Graph version of my Graph #2 by clicking the "FRED graph " link in the first paragraph after Graph #2. It shows the recessions that I talk about in that paragraph.<br /><br />(Your inability to reproduce Graph #2 is not evidence that Graph #2 is incorrect.)<br /><br />//<br /><br />Jazz: "If you want to get a rate of change for the graph 1 data, I think you have to go at it this way, which presents a much more complex picture.<br />http://research.stlouisfed.org/fred2/graph/?g=qHK<br /><b>The value increases all through the 70's</b>..."<br /><br />My point, exactly: "there is a definite increase in borrowing from the late 1960s to the early 1970s to the late 1970s -- all well before the acceleration of inequality and borrowing in the 1980s."<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-72307087489320619922014-01-07T23:09:13.029-05:002014-01-07T23:09:13.029-05:00"low 60's high" should be "earl..."low 60's high" should be "early 60's high."<br /><br />Jazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-42132021002366269982014-01-07T23:07:35.609-05:002014-01-07T23:07:35.609-05:00Something isn't adding up.
Look at simple CMD...Something isn't adding up.<br /><br />Look at simple CMDEBT growth, no denominator.<br /><br />http://research.stlouisfed.org/fred2/graph/?g=qHG<br /><br />Clearly, debt growth after 1980 is consistently greater than before.<br /><br />In your graph 1, the Debt/GDP line is essentially flat from mid 60's to early 80's, and until the late 70's is consistently below the mid 60's value.<br /><br />This makes sense with the graph I posted above, but not with your graph 2. <br /><br />When I try to reproduce your graph 2, I get this:<br /><br />http://research.stlouisfed.org/fred2/graph/?g=qHI<br /><br />And then have to manually change the units on line B [GDP] from "Change, billions of dollars" to "Billions of dollars."<br /><br />The FRED math is done behind a curtain. I'm guessing something blows up in their algorithm when you go through these steps.<br /><br />If you want to get a rate of change for the graph 1 data, I think you have to go at it this way, which presents a much more complex picture.<br /><br />http://research.stlouisfed.org/fred2/graph/?g=qHK<br /><br />The value increases all through the 70's, but never goes above the low 60's high until well into the 80's.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-75906949344162003962014-01-07T16:29:02.830-05:002014-01-07T16:29:02.830-05:00Saying that the rich save more has to be further p...Saying that the rich save more has to be further peeled back I think. Obviously they make more so the number of dollars they can save is much more. I also think they save a greater percentage of their dollars because while their costs of living are higher I think they have a smaller percentage of their income going to their needs. Its also important to remember that they save differently as well. Many people outside the 10% simply save dollars in an account that earns interest, while the wealthy buy things which are savings vehicles and will appreciate. So I think many of the savings charts are actually looking at the present prices of things which have been bought to save in. As the stock market appreciates, they don't actually get more dollars in saving, but the price of what they save appreciates.<br /><br />They live in a different world than the average guy and when they talk about their savings its not just dollars in an account or in a cookie jar like many in the lower rungs, its assets which fluctuate in prices and they have the fed on their side keeping those asset prices form falling too much.<br /><br />Ultimately though they want to sell those assets and its the stockbrokers job to try and convince enough of us rubes to buy them from the rich guys. <br /><br />Monetary policy is designed to make debt more affordable for the little guys. It doesn't give you more dollars it stretches your dollar by allowing you to lower present payments but make them for a little longer....... string you along<br /><br />So the debt drives the inequality as clonal says<br /><br />And this inequality isn't a cause its a result of policiesGreghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.com