tag:blogger.com,1999:blog-2098432983500045934.post5008690968999260311..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Ryan Avent's Meme of TroublesThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2098432983500045934.post-13603648451559448752014-02-23T14:27:22.729-05:002014-02-23T14:27:22.729-05:00I like your post, Jazz. The only problem I have is...I like your post, Jazz. The only problem I have is with your ambiguous terminology. The debt component in your "CPI vs Debt Growth" graphs is "YoY Change" in the debt of households and nonprofits. YoY Change is the annual increase in debt, or "debt growth", so I have no problem here.<br /><br />But you are looking at the annual increase in debt. I am talking about "the growing <i>accumulation</i> of private debt". What you call debt growth, I call "new use of credit" <a href="http://newarthurianeconomics.blogspot.com/2014/01/operational-differences-between-credit_14.html" rel="nofollow">so as to distinguish</a> the boost it provides from the drag created by accumulating debt.<br /><br />On a separate note... It is not altogether unreasonable to say that once it begins, inflation can become self-perpetuating. That is the common argument used to explain the Great Inflation. <br /><br />It explains why it took so long to stop that inflation. <b>But it does not explain how that inflation got started.</b> <br /><br />I claim that both personal income and non-financial profits were squeezed by the costs that produced growing financial profits, and that this squeeze was the originating force that gave rise to that inflation in the first place.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-42294847595917092412014-02-23T12:14:51.472-05:002014-02-23T12:14:51.472-05:00But the original problem goes back to the 1950s an...<i>But the original problem goes back to the 1950s and 1960s, the gradual, relentless increase of financial income relative to wages and productive-sector profit.</i><br /><br />I agree totally. Also th previous paragraph.<br /><br />But --<br /><br /><i>The problem that arose in the 1960s was the growing accumulation of private debt. Growing debt increased costs for those who owed it and increased incomes for those who owned it. These initial costs stand as the force underlying the rise of the Great Inflation in the mid-1960s.</i><br /><br />This is a testable hypothesis. <a href="http://jazzbumpa.blogspot.com/2014/02/a-look-at-debt-and-inflation.html" rel="nofollow">The data does not support it</a>.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.com