4 ms·
It's funny that the model we ended up with is that social activities of government can only be funded by budget-constrained financing where deficits are viewed
by dv_dt 8y ago
It's funny that the model we ended up with is that social activities of government can only be funded by budget-constrained financing where deficits are viewed with alarmism, with taxes not really causing strong growth/shrink effects.
On the other hand commercial activities can be funded via issuing currency through fractional reserve banking - causing national and global asset bubbles with periodic recessions and terrible effects on growth and productivity.
I think we need to move to different mental models of both to advance past our current economically induced problems.
- chii 8y ago> social activities of government can only be funded by budget-constrained financing > commercial activities can be funded via issuing currency through fractional reserve banking It's because the benefits of social activities cannot be captured and its value extracted. Commercial activity can - and therefore, there's motive for somebody to fund it to get richer.