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| What is a good about Covid 19 related? |
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| Marco:
--- Quote from: IDEngineer on March 29, 2020, 08:12:55 pm ---As an ever-increasing percentage of the budget goes to debt service --- End quote --- It doesn't work that way for countries. There is a truth purposely hidden by mainstream economists, because like good little globalists they are predisposed to hating sovereignty. There is an infinite capacity to debt, the central bank balance sheet. Printing money as a sovereign country does not lead to hyperinflation, hyperinflation is a symptom of an unsustainable economy caused by far more fundamental forces ... trade and current account balances. Printing money just causes inflation, which is just a form of taxation which additionally allows redistribution from creditors to debtors. A form of taxation which really works well in times of deflationary crises. But the greatest truth of all, the one which scares economists the most is that there is no reason to pay that debt down, in fact a country really shouldn't because that causes deflationary pressure. Once a country has expanded the money supply, it should just leave it expanded as the new normal. So after crises number one the debt to GDP goes to 100%? Not a problem. After crises number 2 it goes to 200%? Still not a problem. 100000000%? Still not a problem. It's all just paper and the new normal. Of course it does require a lot of discipline of the government to not abuse this power. Japan has that discipline, other countries might not. Economists would have rather seen Japan's economy burn to the ground in "creative destruction" and then slowly rebuild. Instead they remained a first world country and had some slow decades ... I think they did well not to listen too much to mainstream economists. |
| julianhigginson:
it's pointing out some very glaring holes in free market capitalism, that's for sure. Hopefully enough people are paying attention and will be as rightfully angry with it as they should be, when they come out the other side. |
| Psi:
If the economy collapses, or even if it just gets damaged to a severe degree, it may allow for a shift to a simpler economic system (with less loopholes) where less wealth is monopolized by the rich, or by people not contributing to society. If a large percentage of the lower class don't have enough money to buy food or housing the government may have no choice but to actually fix things. Note: I'm talking in general, not about a specific country. |
| james_s:
Capitalism in general works very well I think, but it needs some controls to keep things in check. A completely free market works ok for non-essentials but goods and services essential to basic living there has to be a greater degree of control against dramatic price fluctuations. Taxation ought to also be progressive, it should be possible for anyone who makes the right choices to become quite well off, but it should be progressively more difficult to become so wealthy that it snowballs and allows someone to use money to keep acquiring more money without generating any actual value. It could be all but impossible to be a billionaire and it would not stop anyone from becoming extremely wealthy. There is this false idea that the wealthy create jobs but it actually works the other way around. People who build successful businesses create jobs and that makes them wealthy along the way. |
| Psi:
Universal basic income is a difficult thing to get right because it has to take into account a lot of factors. The cost of living is not the same everywhere. But that sort of system would be able to deal with lockdowns much better. |
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