Discussion in 'Economics' started by Banjo, Mar 12, 2019.
The article gives a simplistic view of the economy. The problem is not that the social safety programs are dependent on younger people paying to support older people, the problem is that almost the entire economy is based on the expectation of a forever rising population. Everything from the housing market, automobiles, schools, computers, cellphones, etc. depends on an increasing population. If you want to know what happens if we let the population decline and grow older, just look at Japan, where the price of houses has remained unchanged for 30 years, and the stock market is in a 20 year doldrums.
It's this kind of logic that's the real problem - the idea that everything in life boils down to ensuring that economic aggregates and indices rise forever. Rising house prices benefit precisely nobody except leveraged speculators and flippers; not even existing homesteaders truly benefit, as you have to live somewhere (thus keeping capital in an appreciated property, or paying the rent on said appreciated property is unavoidable) while you're stuck with higher cash costs for taxes and insurance.
Japan is safe, rich, fully employed, with none of the social division, ethnic conflict, and other problems caused by the EU/USA policies of encouraging immigration from the third world. It's also plenty crowded, with limited space and few natural resources. In this day and age, the last thing Japan or any other country needs is a rising population.
Actually Japan is a poster child for stagnation and the issues that come along with it with respect to pension and social security funding, healthcare, public debt....(https://www.economist.com/the-economist-explains/2018/11/26/the-challenges-of-japans-demography if you're unaware of this). And it's the poster child for why jingoism and racism are stupidity when it comes to economics (and just stupidity in general, but free speech and all that for you).
We actually have pretty solid empirical evidence of the detrimental impacts of any kind of deflation and the benefits of mild and predictable inflation. Surely you're aware of that given your background in macro economics? If, as your comments suggest, you have zero awareness of the fact that our entire banking and economic system is based on the concept that things will inflate over time, and elimination of that concept takes us back to basically prehistoric civilization, then perhaps a basic grounding in macro would be beneficial to you before forming any more opinions on the matter?
The only reason that mild inflation is acceptable through current mechanisms is because until now, that was the only tool we had. I believe that a government should be able to mint a cryptocurrency that achieves the same results as inflation without arbitrary and invisible taxation. That is, something like a formula that dictates what disappears from your bank account if you don't spend it by day X. I know it's crazy, but I think it's doable. I wonder if anyone is exploring this idea.
That is an interesting concept, worth thinking through the implications. Also maybe interesting to think about even if not sponsored by a government?
Maybe, but I can't imagine that anyone would accept this if everyone wasn't subject to the same treatment. Only a government can do it. I imagine Estonia will try a cryptocurrency at some point. They've had good results so far with their e-voting/e-citizenship services.
Forced consumption/spending? Seriously? In addition to (unrelated)taxation? Seriously?
Among MANY things, income inequality would then be guaranteed by government! But hey, everyone would have the same responsibility to use-it-or-lose-it, right? Personally, I have no problem with income inequality, so long as the freedoms necessary to change one's lot in life exist. Forced consumption by itself removes many of those freedoms. Taxation removes or continually modifies still other freedoms. Ahhh, but your family will be so proud as you follow in your fathers footsteps.
Yea, I realize income inequality is NOT the topic. But this idea of forced consumption/spending, combined with (unrelated)taxation, eliminates freedoms necessary for an individual to excel financially. And that's just from the 30000 foot view!
You understand one of the purposes of inflation right? Prevent hoarding, encourage consumption.
Deflation kills the entire economy and therefore is detrimental to everyone no matter how awesome you are to exploit your freedom in life. So since deflation is pretty generally accepted as very bad and mild inflation is not nearly as bad, and balancing on the knife edge more or less impossible, we accept mild inflation. So what you're decrying is the status quo, the dollar you had yesterday is worth slightly less today if you don't spend it. The alternative to that is reliving 1929-1940. Or maybe a new idea like @nooby_mcnoob proposed.
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