3 ms·
It seems to me that the original is more along the lines of "bank and government debt may be less efficient allocation of capital than giving it to the people w
by jfrunyon 5y ago
It seems to me that the original is more along the lines of "bank and government debt may be less efficient allocation of capital than giving it to the people who will end up spending it anyway". Because it is. Debt is almost always less efficient than using cash - especially if you're not rich.
- notahacker 5y agoYes and no. Debt is obviously less beneficial than cash to the person who has to repay, and cash carries an opportunity cost rather than a direct one with repayment timescales, but newly created money is more likely to be allocated efficiently with respect to economic growth when handed to those who expect to be able to repay. You can plausibly argue it's [Kaldor Hicks] efficient as well as more equitable to take money off the rich and give it to ordinary consumers if the rich aren't reinvesting in businesses because they don't see people having the funds to demand stuff in future (or if they're intentionally stifling their part of the economy or plain unimaginative) but the article seems to stop short of committing to that. It suggests government debt (much of it as a result of handouts to the needy) is part of the problem and appears lukewarm about redistribution.