> Jochem wrote: > Lots of stuff here so I'll just number responses:
1.) You're just restating the problem over and over: falling asset prices. We agree, but what about the solution? 2.) You're not offering any solution, nor is Buiter beyond "do nothing, it'll cause you problems down the road." 3.) "Crowding out private investment ..." is BECAUSE of falling asset prices. 4.) There's no problem for the US gov't in borrowing money right now, so we can easily finance the stimulus. 5.) It's BOTH raising taxes AND lowering spending, but Buiter makes a good point that we don't have a great track record there and even if we didn't have this crisis the future doesn't look good. At the end of the day you either think we need to stop falling asset prices incurring downstream problems, or you think the downstream problems are more worrisome than the effects of falling asset prices. I fall into the first camp. And I would offer that it might be a tad bit easier to be in camp #2 when you're in another country. That being the case, Buiter is awesome IMO and he studied under Tobin who basically predicted this back in 1984: "I [suspect] we are throwing more and more of our resources, including the cream of our youth, into financial activities remote from the production of goods and services, into activities that generate high private rewards disproportionate to their social productivity. I suspect that the immense power of the computer is being harnessed to this 'paper economy', not to do the same transactions more economically but to balloon the quantity and variety of financial exchanges I fear that, as Keynes saw even in his day, the advantages of the liquidity and negotiability of financial instruments come at the cost of facilitating nth-degree speculation which is short-sighted and inefficient. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:287692 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
