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Absolutely, which is why it is fair to err on the side of inflation instead of deflation when managing the money supply. But stability is more important than ei

Absolutely, which is why it is fair to err on the side of inflation instead of deflation when managing the money supply. But stability is more important than either inflation or deflation, as an erratic money supply increases uncertainty into the value of trades.

epistasis 5y ago
Agreed, and IMHO inflation/deflation, for all the difficulty of measuring them, is probably the best way to know if the money supply is to high or low. This is also why I think Bitcoin rests on shaky foundations, and why I get tired of people who want a balanced federal government spending budget.
- imtringued 5y ago
  Companies borrow to increase their net worth. If necessary they don't run balanced budgets. The point of the debt is that you end up better off with it than without. If the government were to optimize its net worth, then it would be pretty obvious that borrowing money to build transportation infrastructure and providing healthcare is "good" government spending and doing tax cuts or welfare is bad with debt. I don't know why but a lot of people pretend that governments are basically private households and all government spending is consumption.
  - lotsofpulp 5y ago
    > and providing healthcare is "good" government spending Not all of it though. Giving an 80+ year old dialysis or extending their life a few months or nursing home care requiring round the clock staffing is not going to net any returns for society. A third of healthcare spending was post 85 years of age, as of data 20 years ago. Surely it has skyrocketed since: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ Imagine these resources put towards children. And fewer children will lead to even higher healthcare spending, since as far as I know, much of the tasks for elder care is not yet in the wheelhouse of automation, and it is highly undesirable work.

epistasis 5y ago

Agreed, and IMHO inflation/deflation, for all the difficulty of measuring them, is probably the best way to know if the money supply is to high or low. This is also why I think Bitcoin rests on shaky foundations, and why I get tired of people who want a balanced federal government spending budget.

imtringued 5y ago
Companies borrow to increase their net worth. If necessary they don't run balanced budgets. The point of the debt is that you end up better off with it than without. If the government were to optimize its net worth, then it would be pretty obvious that borrowing money to build transportation infrastructure and providing healthcare is "good" government spending and doing tax cuts or welfare is bad with debt. I don't know why but a lot of people pretend that governments are basically private households and all government spending is consumption.
- lotsofpulp 5y ago
  > and providing healthcare is "good" government spending Not all of it though. Giving an 80+ year old dialysis or extending their life a few months or nursing home care requiring round the clock staffing is not going to net any returns for society. A third of healthcare spending was post 85 years of age, as of data 20 years ago. Surely it has skyrocketed since: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/ Imagine these resources put towards children. And fewer children will lead to even higher healthcare spending, since as far as I know, much of the tasks for elder care is not yet in the wheelhouse of automation, and it is highly undesirable work.