Economics

Alternative link: https://archive.ph/ce08r

"Specifically, let me make three points. First, while $34 trillion is a very large figure, it’s a lot less scary than many imagine if you put it in historical and international context. Second, to the extent debt is a concern, making debt sustainable wouldn’t be at all hard in terms of the straight economics; it’s almost entirely a political problem. Finally, people who claim to be deeply concerned about debt are, all too often, hypocrites — the level of their hypocrisy often reaches the surreal.

How scary is the debt? It’s a big number, even if you exclude debt that is basically money that one arm of the government owes to another — debt held by the public is still around $27 trillion. But our economy is huge, too. Today, debt as a percentage of G.D.P. isn’t unprecedented, even in America: It’s roughly the same as it was at the end of World War II. It’s considerably lower than the corresponding number for Japan right now and far below Britain’s debt ratio at the end of World War II. In none of these cases was there anything resembling a debt crisis. ..."

Why? Because apparently they need some more incentive to keep units occupied. Also, even though a property might be vacant, there's still imputed rental income there. Its owner is just receiving it in the form of enjoying the unit for himself instead of receiving an actual rent check from a tenant. That imputed rent ought to be taxed like any other income.

If banks would not be allowed to lend out more than what they have in terms of deposits, or if they would only be allowed to lend out twice that amount, what would be the most significant difference with the current fractional reserve system (in which the cash-reserve ratio can be as high as 1:9)?

I'm reading that the current system increases the availability of credit, which in turn helps the economy to grow. But if banks would only be allowed to lend out half of what they are currently lending out, wouldn't the supply of money simply go down, and thus the value of money up, effectively leaving banks with the same lending power?

Current system:

• Total amount of money in circulation: central bank money x money multiplier. Most money is created by commercial banks.

Alternative system:

• Total amount of money in circulation: central bank money. All money is created by central banks.

I'm not asking what would happen if this would change over night (e.g. sudden decrease of money, monster deflation etc.). I'm asking what is the benefit (and to whom) of doing it the way it is currently done.

AI summary:

Rising rent prices in the US have led to homelessness, poverty, and increased crime rates. The issue is complex, with housing costs tying into other aspects of people's lives. The situation has worsened over time, leaving even high earners struggling to afford basic necessities. Despite certain economic indicators improving, costs like rent and healthcare remain high, impacting people's quality of life. The problem is exacerbated by income inequality, and while some cities offer better affordability, the overall issue persists nationwide.

I asked the question on Twitter, but I don't know if I'm going to get any real answers or any answers at all over there. Here it is:

What's the appeal to taxing inheritance differently than other types of income? Aren't flat taxes bad and regressive?

I've occasionally encountered emphatic support for a 100% inheritance tax, but I'm never sure if that's not really a joke coming out of people's frustrations with nepotism and generational wealth accumulation. It seems like there are better ways to address those things than making exceptions to the progressive income tax.

Highlights include PCE 1 year price index dropping to 3.0 (mostly due to base effects as 2022 data rolls off).

Income increase slowed, but spending picked up. Not a good direction for metrics like savings rate, but good for GDP.

Heavy societal undertones...

FedNow appears to be launching July 23, 2023. To me, it doesn't seem very good in the sense that the Fed now gets to be a middle man to payment transactions (sure it's "instant" but we're all aware that security != convenience).

It's also a "centralized" solution.

It could be a stepping stone to a centralized digital bank currency is my fear. And also the fed will now be able to see/monitor all transactions through it.