An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
The people who spend owe the people who save. And that means lower demand for goods and services resulting in recession and ultimately depression. This kind of private debt is important. The concept of a Debt Jubilee (periodic cancellation of all debts) was used in past economies to fix this situation. In the current era redistribution of debt, wealth, and income through living wage laws, progressive tax policy, inheritance tax laws, and relaxed bankruptcy laws could accomplish the same thing.
It could also be argued that the contrary is true as well, that the people who are saving owe their ability to save to those who are spending! After all if no one spends how can you have anything to save?
But the main problem with your statement is that it is taking the view that when a person who needs to borrow from a bank takes out a loan the funds they are getting are only there because someone else had "extra" saving. That is demonstrably false.
8 comments:
Me.
Ha! Get in line, pal! ;)
The people who spend owe the people who save. And that means lower demand for goods and services resulting in recession and ultimately depression. This kind of private debt is important. The concept of a Debt Jubilee (periodic cancellation of all debts) was used in past economies to fix this situation. In the current era redistribution of debt, wealth, and income through living wage laws, progressive tax policy, inheritance tax laws, and relaxed bankruptcy laws could accomplish the same thing.
Mars Needs Women, Earth Needs Money, Lets Make A Deal
http://www.washingtonpost.com/news/post-politics/wp/2015/09/25/donald-trump-let-russia-fight-the-islamic-state-in-syria/
Trump talking sense.
Random,
How about an arms embargo on ISIS -- via Saudi Arabia et al?
Trump did not receive the memo regarding ISIS: Re. they are on "our side"
"The people who spend owe the people who save"
It could also be argued that the contrary is true as well, that the people who are saving owe their ability to save to those who are spending! After all if no one spends how can you have anything to save?
But the main problem with your statement is that it is taking the view that when a person who needs to borrow from a bank takes out a loan the funds they are getting are only there because someone else had "extra" saving. That is demonstrably false.
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