MarxistWell if interest rates for general consumers were 0 or near zero as well - there would be no reason not to take on massive amounts of debt - assuming whatever you were taking on that debt for would make you money in some way or you could structure the payments well enough not to destroy your standard of living. So it'd even make sense for a household lol.
It's still a bad comparison, though. The government doesn't have to make money on its money. Instead, it has to hope for continued growth of its tax base to eventually cover its debt - or, it can devalue its currency. Households may be able to claim future income growth which sort of compares, but households certainly cannot decide to cause inflation. There's a whole economic toolset available to the federal government that households simply don't have.
There's some (contested) evidence that the higher a country's debt load compared to GDP, the slower its economic growth. However, there isn't really any evidence of causation. In fact, Krugman argues the reverse of what you would expect - it's actually slower economic growth contributing to higher debt load, not debt slowing down growth.
[quote=Marxist]Well if interest rates for general consumers were 0 or near zero as well - there would be no reason not to take on massive amounts of debt - assuming whatever you were taking on that debt for would make you money in some way or you could structure the payments well enough not to destroy your standard of living. So it'd even make sense for a household lol.[/quote]
It's still a bad comparison, though. The government doesn't have to make money on its money. Instead, it has to hope for continued growth of its tax base to eventually cover its debt - or, it can devalue its currency. Households may be able to claim future income growth which sort of compares, but households certainly cannot decide to cause inflation. There's a whole economic toolset available to the federal government that households simply don't have.
There's some (contested) evidence that the higher a country's debt load compared to GDP, the slower its economic growth. However, there isn't really any evidence of causation. In fact, Krugman argues the reverse of what you would expect - it's actually slower economic growth contributing to higher debt load, not debt slowing down growth.
Salamancer, can I just say that it's really cool that we have you in this thread? You're explaining things I'm not entirely fluent with in a pretty easy way to understand.
Salamancer, can I just say that it's really cool that we have you in this thread? You're explaining things I'm not entirely fluent with in a pretty easy way to understand.
I recommend Paul Krugman's blog. For a Nobel winner, he's very easy to understand and he writes prolifically. http://krugman.blogs.nytimes.com/
I tend not to like his blatantly political posts because he cherry-picks data just like every other political operative. But his posts about austerity vs. stimulus, anything "wonkish," about national debt, and about our current economic situation (the "Liquidity Trap") are spot-on. He's proven that when he puts pen to paper and uses testable economic models, he predicts economic happenings pretty accurately.
I recommend Paul Krugman's blog. For a Nobel winner, he's very easy to understand and he writes prolifically. http://krugman.blogs.nytimes.com/
I tend not to like his blatantly political posts because he cherry-picks data just like every other political operative. But his posts about austerity vs. stimulus, anything "wonkish," about national debt, and about our current economic situation (the "Liquidity Trap") are spot-on. He's proven that when he puts pen to paper and uses testable economic models, he predicts economic happenings pretty accurately.
I still think of Paul Krugman as "the Paul Krugman" because my first exposure to him was from a Ukrainian professor who didn't use articles properly lol. I still hear her voice calling him "the Paul Krugman" - but he's a pretty excellent source for neo-keynesian analysis (and liberalish politics). He's still an economist, but being a Keynesian he's firmly against most of the conventional wisdom about economics coming from the anti-Keynesian (Milton Friedman) GOP.
Debt-growth ratios would be really hard data to work with because you'd have to add a bunch of footnotes for historical circumstances - since basically any data set that includes World War 2 would show clearly that debt far exceeding 100% of GDP would net tremendous economic growth lol. My favorite early intro-Macro papers were from teh students that looked at taxation and included the 1950's - since if you look at that data you'd come to believe that higher taxes results in economic growth as well since the economic wave of ww2 and the reconstruction of basically the whole world carried well into the 50's despite (relative to now) extremely high taxes in the US.
I still think of Paul Krugman as "the Paul Krugman" because my first exposure to him was from a Ukrainian professor who didn't use articles properly lol. I still hear her voice calling him "the Paul Krugman" - but he's a pretty excellent source for neo-keynesian analysis (and liberalish politics). He's still an economist, but being a Keynesian he's firmly against most of the conventional wisdom about economics coming from the anti-Keynesian (Milton Friedman) GOP.
Debt-growth ratios would be really hard data to work with because you'd have to add a bunch of footnotes for historical circumstances - since basically any data set that includes World War 2 would show clearly that debt far exceeding 100% of GDP would net tremendous economic growth lol. My favorite early intro-Macro papers were from teh students that looked at taxation and included the 1950's - since if you look at that data you'd come to believe that higher taxes results in economic growth as well since the economic wave of ww2 and the reconstruction of basically the whole world carried well into the 50's despite (relative to now) extremely high taxes in the US.
http://projects.wsj.com/games/thefederator/?mg=inert-wsj
you cool econ guys might like this game
LKincheloeturtsmcgurtshttp://isthegovernmentopen.com/
If you're worried about clicking that link..
wall of text
Holy shit dude are you a hacker?
[quote=LKincheloe][quote=turtsmcgurts]http://isthegovernmentopen.com/[/quote]
If you're worried about clicking that link..
[code]wall of text[/code][/quote]
Holy shit dude are you a hacker?