3 ms·

I have doubts about the idea "spend what you have". It is framing wrongly the problem. Money are not something "you have". Money are "a promise" to get somethin

by vladms 3y ago

I have doubts about the idea "spend what you have". It is framing wrongly the problem. Money are not something "you have". Money are "a promise" to get something "in the future". Evaluating how much that promise "will be worth it" is complex. To give an example "at the limit" - sometimes easier to see the issues. Assume all people in the world die except 2 people, if they inherit all the wealth, each will be multi-billionaires (or something - no clue how much money is in the whole world). That would not mean they could do a lot with that "money". Back to austerity. I agree with you that the key is "spending in reasonable ways". But to understand what is reasonable you must make a projection. And that is the hard part. A projection will probably affect the result. Of course you are correct you can't just say we will spend 10x more because we will have 10x more, so there are limits...

roenxi 3y ago
> I have doubts about the idea "spend what you have". It is framing wrongly the problem. Money are not something "you have". Money are "a promise" to get something "in the future". Around the time they switched to that frame, wages decoupled from productivity and what I might call working-class power started to get crushed. It is, and I say this at my most sarcastic, a miracle of modern economics that once we stop trying to measure how much we have in consistent units suddenly resources stop being a problem and big borrowers can just take what they need. Although what I actually think is someone is getting ripped off really badly; I'm just not sure who. Hopefully retirees since I'm not one of them yet.
squillion 3y ago
> Assume all people in the world die except 2 people... That's a great argument I had never heard before, thanks! The way I see it is that any given economy has an amount of real resources (labor, raw materials, know-how...) that are often under-utilized. In such cases targeted government spending can mobilize those resources in a way that increases output without creating the bottlenecks that cause inflation.

by vladms 3y ago

roenxi 3y ago

> I have doubts about the idea "spend what you have". It is framing wrongly the problem. Money are not something "you have". Money are "a promise" to get something "in the future". Around the time they switched to that frame, wages decoupled from productivity and what I might call working-class power started to get crushed. It is, and I say this at my most sarcastic, a miracle of modern economics that once we stop trying to measure how much we have in consistent units suddenly resources stop being a problem and big borrowers can just take what they need. Although what I actually think is someone is getting ripped off really badly; I'm just not sure who. Hopefully retirees since I'm not one of them yet.

squillion 3y ago

> Assume all people in the world die except 2 people... That's a great argument I had never heard before, thanks! The way I see it is that any given economy has an amount of real resources (labor, raw materials, know-how...) that are often under-utilized. In such cases targeted government spending can mobilize those resources in a way that increases output without creating the bottlenecks that cause inflation.