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While that is all true, at least to me it sounds like the old explanation of why Communism failed - "It was indeed superior, but all the world had to agree so f
by seer 7y ago
While that is all true, at least to me it sounds like the old explanation of why Communism failed - "It was indeed superior, but all the world had to agree so for it to work".
Say one country develops this utopia where everyone doesn't have to compete to survive, either companies or individuals.
Its neighbour though remains with the old Capitalist model. In a generation or two the struggling capitalist country could overtake the utopia one in production, wealth or even by force. Then you're back to square one.
- hliyan 7y agoI'm merely suggesting that we maintain the money supply at a level that does not result in any inflation.
- pjc50 7y agoPer other comment: https://news.ycombinator.com/item?id=21664066 https://news.ycombinator.com/item?id=21664066 ; inflation is already near-zero, and this is controlled through interest rates rather than simple M0.
- hliyan 7y agoI do agree with this, but what of pension plans? At 2% inflation, a fund of $10,000 will deplete to slightly over $6000 (inflation adjusted) in 20 years...
- pjc50 7y agoWe're back to Picketty and "r > g" here; you're not holding the pension as cash, so you're making a return, so what rate is the return at? And how does the aggregate rate of return compare to the rate of growth in the economy? Or are people seriously proposing having 0 GDP growth and 0% interest rates and 0% expected stockmarket returns? A strange world that's almost certainly unstable. (There is a much broader question that if you expect a dollar to buy you a loaf of bread today, is it really reasonable to expect the same dollar to buy a loaf of bread in 40 years? And what level of stasis would be required to achieve that?)
- koheripbal 7y agoThe states goal of the Fed is to "maintain the rate as close to zero as possible while keeping it safely positive.".