I think you're right that we have to find a new way for the economy to work. We don't know what that way is. It certainly needs more savings and less fizz. Whatever it is (or will be) is the to-be state, which we really don't yet understand.
Until we get there, we live in the as-is state, which currently is very unstable -- and getting worse. . For many people that's quite a problem. So the question is how to survive the as-is state until we can understand a desired to-be state. (Most likely the to-be state will emerge and won't actually be "figured out.") Whether you favor Keynesian economics or not, we can't ignore the traversal from here to there. How will it really happen? What will happen to people along the way? Those questions can't be ignored. -- Russ Abbott _____________________________________________ Professor, Computer Science California State University, Los Angeles o Check out my blog at http://russabbott.blogspot.com/ On Mon, Feb 9, 2009 at 11:45 AM, Stephen Thompson <[email protected]>wrote: > Sorry, but 60-70%+ of our economy is spending. If individual citizens > won't > spend (within reason and have a reasonable savings rate too) then the > economy > will have trouble. There are lots of factors involved - bad debts and > banks won't lend, > etc. > > However, there does need to be spending in the economy. So the Gov't needs > to step > up and spend. Classic Keynesian economics. > > Savings are good too, but savings alone will not move the economy along. > > Stephen Thompson > Mpls, MN > > > > > Mike Oliker wrote: > > Are we fighting the last Depression with this stimulus bill, when our > situation is quite different? In 1929 we had a huge bubble of factory > building, leaving us with tremendous idle capacity. People were saving a > great deal and investing it in stocks which collapsed. > > > > Today we have borrowed massively against assets which has dropped a lot in > value. Our economy has been consistently stimulated within an inch of its > life. Perhaps more stimulus is not the answer. > > > > Perhaps what we need is a massive savings plan. Cut withholding taxes for > a few years – it is broad based with a bias towards the low end of the > scale, it helps businesses which hire or keep their employees, and people > will save it – which is a good thing. They will pay down their mortgages > and their credit cards and cash will flow into banks as equity, helping to > repair everyone's balance sheets. > > > > From a base of fiscal soundness we are better able to make the transition > to an economy featuring more savings and exporting and infrastructure > greening/modernizing and less consumption. The economy we had, based on > borrowing against our houses to consume a lot, is not coming back; at least > not anytime soon. We need to move towards a new economy which is waiting to > be born. > > > > -Mike Oliker > > Albuquerque, NM > > ------------------------------ > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org > > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org >
============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
