awhile back I wrote: >>>> In standard accounting, a government's net worth = estimated >>>> market value of assets (to the government) minus estimated >>>> market value of debts.
John Vertegaal responded: >>> ... standard accounting is based on the assumption that worth is >>> realizable. Accounting wouldn't make sense if it didn't. This kind >>> of worth isn't a fait accompli but depends on defining future >>> activities, that themselves will become determined at a later >>> time. The economy is a dynamic process that eludes any kind of >>> static determination of its components. to which: >> _Of course_ net worth is not a "fait accompli." (Name someone who >> thinks otherwise. John V: > The Wall Street banksters perhaps? After skimming "wealth" off the top > of _debt_, they suddenly found they needed trillions to be bailed out. me: >> I'm not one.) John V: > The banksters, also "emphasizing net worth", didn't see it coming. And a > crash of the financial sector wipes out all corporate accounts too. > Given that one cannot _theorize_ an impending crash from an estimate of > an equilibrium condition, how useful is it for a Marxian economist to > stress a theory that's valid in "normal" times only? Or does your > understanding of "net worth", as an accounting estimate, somehow gives > you a different handle on what's truthfully going on? This is a nonsensical _non sequitur_. We were talking about accounting and the need to focus on other things besides debt alone, i.e., to bring in the role of assets.[*] It's quite clear that a focus on net worth alone is wrong, but so is a sole emphasis on debt (which is what I was talking about). As I said, accounting is not the same as economics. I don't know where the stuff about equilibrium is relevant). Nor do I see where "theorizing" or "Marxian economics" are relevant. It's like having a conversation about the role of the Earth's Moon in astronomy and having someone ask "why aren't you discussing Picasso's contribution to abstract expressionism?" This conversation is over. -- Jim Devine / "In an ugly and unhappy world the richest man can purchase nothing but ugliness and unhappiness." -- George Bernard Shaw [*] I had written, for example, that: >>> net worth should be emphasized instead of debt. Unless the Italian government gets a good deal by selling its assets (which is quite doubtful), sale of assets to pay debts likely reduces its net worth.<<< _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
