tag:blogger.com,1999:blog-2098432983500045934.post6483242426418985013..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Beyond EchoesThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2098432983500045934.post-43521105433903009512010-12-03T13:49:23.444-05:002010-12-03T13:49:23.444-05:00You are exactly correct about private debt it is a...You are exactly correct about private debt it is a drag on GDP growth. The people squawking about the debt ratios are ALWAYS referring to our govt debt. Especially that which is owed to China. This is the debt that the bond markets are going to revolt against supposedly.Greghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-81145934280802917882010-12-03T04:57:22.438-05:002010-12-03T04:57:22.438-05:00And they're breakin'out the bulldozers to ...And they're breakin'out the bulldozers to reduce the miles of government.<br /><br />Hey, Greg. I'm pretty good with "levels" and "rates" but not comfortable yet with the words "stocks" and "flows." But a while ago I did say: "Debt is cumulative. Income is calculated annually." So I *can* see it, sometimes...<br /><br />Still, I am willing to say that the high *level* of accumulated private debt is a drag on the *rate* of GDP growth. Because some portion of GDP must be taken out of the consumption-and-production stream, and used to make payments to the finance stream. And then, finance grows like gangbusters... until the consumption-and-production stream can no longer support it. <br /><br />And then it becomes "worth reporting."The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-66443489779238512072010-12-02T21:18:04.157-05:002010-12-02T21:18:04.157-05:00Good post. Getting these ratios wrong is a big pa...Good post. Getting these ratios wrong is a big part of the problem in our world right now. The one you highlight here is interesting because how can anyone argue that the way to restore growth when GDP falls is to decrease the Govt contribution to GDP. Its incredible that anyone with a sixth grade math aptitude doesnt just laugh at this.<br /><br />Another one is the govt debt to GDP ratio. How can one compare a stock relative to a flow and think you have anything worth reporting. This is like looking at the miles of highway in the US relative to the miles driven by US drivers and thinking if the miles driven falls off it must mean we have to reduce the miles of roads????<br /><br />sheeeeeeshGreghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.com