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>>Discounting the interests of future people, Ramsey wrote, is “ethically indefensible and arises merely from the weakness of the imagination. Climate change,
by frankbreetz 6y ago
>>Discounting the interests of future people, Ramsey wrote, is “ethically indefensible and arises merely from the weakness of the imagination.
Climate change, the federal debt, increasing shareholder value over anything else, I wonder what Ramsey would have to say about the current state of the world.
- slivanes 6y agoWould he be working at a FAANG trying to get more clicks for advertiser dollars?
- snehalsam 6y agoOr building a algo to price futures and options
- masklinn 6y agoThat seems very unlike the political and ethical philosophy he espoused in life. And he was an academic and teacher throughout, graduating in 1923 and becoming a fellow of King’s in 1924, then lecturer, then Director of Studies.
- ppod 6y agoIncreasing economic growth is the most reliable method we know of to help future generations.
- shkkmo 6y agoI think that increasing breadth and depth of human knowledge is far more reliable.
- dwaltrip 6y agoI don't think you mean this... But it sort of sounds like you are saying it doesn't matter how we increase the number after the dollar sign as long as we manage to do so.
- viklove 6y agoWe are severely indoctrinated if we believe selling more ads will somehow help future generations (or even the present generation).
- viburnum 6y agoClimate change is bad but the federal debt is good. It allows the private sector to be net savers and creates overall stability. It’s also clearly sustainable, hundreds of years and counting.
- throwaway894345 6y agoPresumably there is some threshold at which debt (or the rate at which we acquire it, or one of the aforementioned adjusted for population) is a bad thing and unsustainable, right? This is a genuine question—macroeconomics is counterintuitive to me.
- wz1000 6y agoIt is bad when it causes excessive inflation. The "debt" in itself can never be unsustainable, since it is denominated in USD, which is a floating fiat currency that the US government controls. The US government is the source of all dollars, so it can never 'run out of dollars'. However, printing too many dollars can lead to inflation. So the deficit could be called unsustainable if it causes unwanted inflation.
- eru 6y agoThat's not the only possibility. You forgot taxes. High government spending means high taxes now, or via debt, high taxes in the future. In general, when the government consumes a lot, the private sector can consume less of the national product.
- wz1000 6y agoDebt does not (necessarily) mean high taxes in the future. Deficit is Government spending - Tax collected. High deficits might lead to inflation. One way to control inflation would be to increase taxes(draining money out of the economy) > In general, when the government consumes a lot, the private sector can consume less of the national product. This is not exactly true. When there is still "slack" in the economy(it is not at full employment, the private sector isn't investing for other reasons etc.), government spending tends to have low inflationary pressure. It is only when the economy is operating at peak productive capacity that government consumption crowds out private sector consumption.
- lazyjones 6y agoIf there's one thing sorely lacking from the public discussion about what you mentioned, it's a balanced and thorough evaluation including reliable estimates for the effects. The federal debt has had no observable effect whatsoever for decades, the dollar is as strong and internationally valued as ever. Climate change has not made anything measurably worse in the 3 decades people have been screaming about it. The bit about shareholder value is too unspecific.
- gwern 6y agoHe might well say that the problem is that it is not growing fast enough and that concerns about the federal debt or climate change are morally indefensible. (An example of this: the coronavirus crisis has exposed the scleroticism and poverty of the present, and the extent to which the 'unseen' has been sacrificed by regulators and how other less important issues have distracted from important things like pandemic prevention.) If you take Ramsey's ideas about intertemporal consumption and the bliss point seriously and you try to do an empirical calculation, it generally implies that the utilitarian thing is to have savings/investment rates anywhere up to 98% (!!!) vs the current savings rate of ~0%: https://plato.stanford.edu/entries/ramsey-economics/#NumeEstiOptiRateSavi https://plato.stanford.edu/entries/ramsey-economics/#NumeEst... See also 'turnpike theory' which builds on Ramsey and also finds that generally, the optimal thing is to grow as fast as possible to hit the limits as quickly as possible and only then start consuming: https://en.wikipedia.org/wiki/Turnpike_theory https://en.wikipedia.org/wiki/Turnpike_theory