On Thu, Feb 26, 2009 at 7:31 PM, David B. Shemano <[email protected]> wrote: > Raghu writes: > >>> Two questions: >>> 1) How do you know that "we are poorer" and that there is "no >>> hoarding"? What do these terms even mean? > > We are poorer in the sense we have in reality less wealth than we thought we > did. This seems self-evident to me, so in all honesty, I am not sure how to > answer. Two years ago, people would look at their personal balance sheet and > think that their net wealth would allow them to satisfy a certain level of > desires. Many people acted on those desires, thereby incurring debt, which > would be ok, if they actually had the net wealth to satisfy the debt. That > turned out not to be true.
David, It is true that there is less "wealth" today than in 2006, while debt remains at the same level. But this is just an accounting entry. Just because stock prices and house prices have collapsed doesn't mean the economy's ability to produce goods and services is lower today than it was in 2006. All it means is the people with the desire/need to consume are not the ones who have the income and vice-versa. That said, I agree with you that we cannot afford to maintain the 2007 levels of consumption. Not because, there isn't enough wealth, but because it is ecologically unsustainable for everyone to live in McMansions, drive SUVs and buy big screen TVs every 2 years. However, there is *plenty* of scope for progressive redistribution of consumption, while still reducing the overall levels of consumption, however you may want to define it. -raghu. -- I get mail........ therefore I am. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
