Greetings, all -- Indeed, as Keynes himself would say, "the patient doesn't need rest, he needs exercise". Unfortunately, the borrower and lender of last resort, the US government in this case, has to rush in where the angels of the market fear to tread. Despite what some consider foolishness, there are a number of deferred items in our economy that could go a long way towards pushing the emergence of a better world. Funding for more scientific research and improving energy efficiency strike me as good starts. "Withholding taxes", by which I infer something like payroll taxes, might be a good place to get more take-home pay to every household, and several economists and legislators have proposed such measures. Of course, one of the biggest boosts in recent months has been the drop in energy prices, which we all know is unsustainable. My guess is it will be a number of things - tax cuts, payroll tax holidays, subsidies, credits, and more quantitative easing by the Federal Reserve, among others - that we'll see in the coming months.
- Claiborne Booker - -----Original Message----- From: Russ Abbott <[email protected]> To: The Friday Morning Applied Complexity Coffee Group <[email protected]> Sent: Mon, 9 Feb 2009 12:50 pm Subject: Re: [FRIAM] stimulate savings? 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: =2 0 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
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