Waiting for Godzilla
Well, it's been a loooong time since I created this blog for other purposes, which I hardly remember. But now it will mainly cover the economics I have recently taken a renewed interest in. Wrecking economies and calling it prosperity is what the world's elites have been practicing for many years. Wrote the following at Dean Baker's Beat the Press blog here a while ago, and promised myself (&Mrs. C) I would post it here, to finally get this blog started.
Dean was responding to this Washington Post story (see also here ) saying that Japan's high government debt made it less able to deal with the natural catastrophes it recently suffered. It quoted "economist" Carmen Reinhart: "When you have as much debt as the Japanese have, you're vulnerable to this kind of shock and can't do much about it." The article and this comment are some of the infinity of mainstream/orthodox economic views that are perfectly insane products of the farcical, embarassingly stupid theories which are nowadays called "economics".
So here (and yes, I know when the great Abba Lerner said something similar to Reinhart, and what he meant, and will explain to anyone interested):
_____
Of course the Japanese just owe that dough to themselves. Macro-economically meaningless.
Of course half of it is just the Ministry of Finance - one pocket of the government owing it to the JCB - another pocket. Super-duper ridiculously meaningless.
But if anything, the high debt/gdp makes Japan more flexible. Government debt is money. [I will wax poetic on this, and its converse, in future posts].
Read Reinhart's statement correctly: "When you have as much money as the Japanese have, you’re vulnerable to this kind of shock and can’t do much about it" Sound right to you?
High debt/gdp means the Japanese private sector has a lot of cash it can dip into and immediately spend, perhaps more quickly and responsively than the government, to fix what needs fixing, what was destroyed. Sensible people will say, "If this isn't a rainy day, what is? What, are we waiting for Godzilla?"
Dean was responding to this Washington Post story (see also here ) saying that Japan's high government debt made it less able to deal with the natural catastrophes it recently suffered. It quoted "economist" Carmen Reinhart: "When you have as much debt as the Japanese have, you're vulnerable to this kind of shock and can't do much about it." The article and this comment are some of the infinity of mainstream/orthodox economic views that are perfectly insane products of the farcical, embarassingly stupid theories which are nowadays called "economics".
So here (and yes, I know when the great Abba Lerner said something similar to Reinhart, and what he meant, and will explain to anyone interested):
_____
Of course the Japanese just owe that dough to themselves. Macro-economically meaningless.
Of course half of it is just the Ministry of Finance - one pocket of the government owing it to the JCB - another pocket. Super-duper ridiculously meaningless.
But if anything, the high debt/gdp makes Japan more flexible. Government debt is money. [I will wax poetic on this, and its converse, in future posts].
Read Reinhart's statement correctly: "When you have as much money as the Japanese have, you’re vulnerable to this kind of shock and can’t do much about it" Sound right to you?
High debt/gdp means the Japanese private sector has a lot of cash it can dip into and immediately spend, perhaps more quickly and responsively than the government, to fix what needs fixing, what was destroyed. Sensible people will say, "If this isn't a rainy day, what is? What, are we waiting for Godzilla?"
posted by Calgacus at 1:43 AM
3 comments
