> By talking about "resource allocation", you are ignoring the dynamics of credit and debt. Not at all. > Resources aren't fixed, because labor (a very import

> By talking about "resource allocation", you are ignoring the dynamics of credit and debt. Not at all. > Resources aren't fixed, because labor (a very important resource) is very flexible. If labor is so flexible, why is it so necessary to waste money on trains? (Inflexibility is an argument for temporarily suboptimal allocation.) > Creating lots of debt makes people work hard, Only as long as they feel an obligation to pay back that debt. > and creates the illusion of wealth. No, debt doesn't do that. The things/services that you get in exchange for going into debt may create wealth, or they may just create a hangover. > People do jobs, because you told them you would pay them. People spend money, because they know you are going to pay them. Yes, but none of that has anything to do with what you spend money on. > but can cause people to start doing irresponsible things (which doesn't show up until somebody asks what the elephant is doing with the sofa). Surely you're not arguing that bad resource allocation is good until someone notices....