tag:blogger.com,1999:blog-5338679290238780332.post6820559743302068095..comments2023-07-03T11:34:28.299-04:00Comments on EconoBlast: The Real Problem with Rising Federal DebtDavid L. Kendallhttp://www.blogger.com/profile/16272267770395417058noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5338679290238780332.post-33538207670626992182013-01-19T10:07:05.899-05:002013-01-19T10:07:05.899-05:00Mike, I certainly agree with your observations.
...Mike, I certainly agree with your observations. <br /><br />When I say no one can really live beyond their means, my intent is to focus attention on real economic production --- away from how it is financed with money. No individual can consume goods or services that are not produced. Way too many people just think about the money used to purchase goods and services, ignoring that production of those goods and services is a first, necessary condition for consumption, regardless of how the consumption is financed. This is no trivial point, as I know you certainly understand.<br /><br />The PIIGS in Europe, and yes, we in America, who appear to be consuming beyond our means are consuming only those goods and services that have been produced. It is true that some are consuming at the illegitimate expense of others, either by hook or by crook. <br /><br />The first rule of economics is TANSTAAFL --- there ain't no such thing as a free lunch. My point is that there ain't no lunch at all until it's produced. Consequently, when governments compel us to do things that reduce production today and the ability to produce more tomorrow, that's a really serious problem. That's exactly what so-called "stimulus" spending financed by transfer payments and money creation are doing.<br /><br />You are certainly correct that the advance of technology is not a smooth, continuous movement. In fact, the lumps are very noticeable on a large time scale --- notably, the agricultural revolution and the industrial revolution. Governments around the world appear to be doing just about everything imaginable to forestall the next technological revolution. Still, I believe it will come. Color me optimistic, but governments have always retarded technological and economic advance. I hope my optimism turns out to be justified.David L. Kendallhttps://www.blogger.com/profile/16272267770395417058noreply@blogger.comtag:blogger.com,1999:blog-5338679290238780332.post-37053219599205986422013-01-18T23:36:21.872-05:002013-01-18T23:36:21.872-05:00Great post. I'm group number 1.
Having said t...Great post. I'm group number 1.<br /><br />Having said that, no one should be confused by your comment that it is impossible to "consume beyond one's means." I understand your context... the entire world population can only consume what it produces. But we don't want to lose sight of the fact that individuals or groups within the world constantly consume beyond their means, though perhaps for limited times. In fact, Keynsian economists encourage such behavior - and they seem to be holding all the cards judging from the way western governments <br />are behaving. All this "free" stimulous (through borrowing or inflation) helps establish the cultural view that "living beyond one's means" is a right of citizenship. <br /><br />I hope you are right about advances in technology saving the day, but you qualified that prediction by saying it should "unless something we are doing today is retarding the <br />advance of technology and the formation of what economists call 'capital goods'. In my <br />view, practically everything the government is doing is retarding the advance of technology and capital formation.<br /><br />There have been periods over the centuries where western "civilization" has slipped <br />backwards (even technologically). It's not an ever-constant <br />progression forward, but a lumpy ride. <br /><br />Eventually folks are going to have to realize that growth in the state comes at the expense of personal liberty. I appreciate what you're doing to focus attention on that fact. <br /><br />-mbFiddlinmikehttps://www.blogger.com/profile/15768650794360390233noreply@blogger.comtag:blogger.com,1999:blog-5338679290238780332.post-12887549720892562662013-01-07T17:31:20.805-05:002013-01-07T17:31:20.805-05:00Jake, send me your current email address.Jake, send me your current email address.David L. Kendallhttps://www.blogger.com/profile/16272267770395417058noreply@blogger.comtag:blogger.com,1999:blog-5338679290238780332.post-29674037330133436652013-01-07T12:53:55.149-05:002013-01-07T12:53:55.149-05:00Good post Prof K. Nice to see you blogging again....Good post Prof K. Nice to see you blogging again.<br /><br />I agree with your points here. The burden of debt is that it allows the government to command more resources, which necessitates the private sector command fewer resources. Since public spending is generally less productive than private spending, I see it as an overall loss of value and productivity in the economy.<br /><br />Hope you are doing well!Anonymousnoreply@blogger.com