tag:blogger.com,1999:blog-5362801348602268473.post5411698723625259855..comments2023-11-22T00:49:32.887-08:00Comments on Reflections on Monetary Economics: Financial Assets and National WealthNick Edmondshttp://www.blogger.com/profile/15342983814699700396noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5362801348602268473.post-28478162290143214862022-05-25T18:57:17.430-07:002022-05-25T18:57:17.430-07:00Hi great reading your bloogHi great reading your bloogToms Recipeshttps://www.recipetom.com/noreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-45971958786382948782013-08-20T01:41:07.391-07:002013-08-20T01:41:07.391-07:00I see it slightly differently. In the first scena...I see it slightly differently. In the first scenario, there really is no retirement planning. Workers work till they drop dead. In the second, I had envisioned it as private retirement planning, but it's interesting to think about the parallels with a state pension system.<br /><br />In any event, you are right that the really interesting thing here is transition, whether that's from one scenario to the other or of either scenario in response to shocks. Nick Edmondshttps://www.blogger.com/profile/15342983814699700396noreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-76267831299772588002013-08-20T01:24:27.676-07:002013-08-20T01:24:27.676-07:00In the nature of these things it has corrected ite...In the nature of these things it has corrected iteself.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-38573937276132762612013-08-19T10:57:20.716-07:002013-08-19T10:57:20.716-07:00After thinking about this for several days, I am c...After thinking about this for several days, I am coming to the realization that two very different philosophies are represented here. The first schematic depicts an economy in which everyone plans for retirement on an individual basis. The second schematic provides for government planned retirement. <br /><br />Both systems are commonly found in nations. The interesting thing is the transition between systems. The transition takes a long time to become stable, taking at least one complete working lifetime.<br /><br />Just to mention a few of the transitional changes:<br /><br />1. Immediate transfer of wealth from younger workers to older workers. Younger workers would immediately work harder for less average pay so that older workers (who had prepared for retirement under the previous system) could get benefits. <br /><br />2. A new, extensive accounting system to record retirement credits and debits. This is likely to increase the need for government workers.<br /><br />3. If, in fact, a previous private retirement system existed in the original system, a re- balancing would probably occur. The pace of phase-in from old system to new would be very important.<br /><br />Thanks for another interesting post.<br />Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-71902441190865295352013-08-18T06:01:44.918-07:002013-08-18T06:01:44.918-07:00OK I understand what you mean.
OK I understand what you mean. <br /><br />lxdr1f7http://cmamonetary.orgnoreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-71791131312978944012013-08-18T02:21:35.295-07:002013-08-18T02:21:35.295-07:00I was using the term liability in the sense it is ...I was using the term liability in the sense it is used in national accounts, rather than in business accounts. In national accounts, equity is included under the general heading of liabilities. Net worth in national accounts is therefore equal to all assets less all liabilities (including equity). As liabilities (including equity) have to be recorded at the same value as the corresponding asset, the net worth of the nation is equal to its non-financial (real) assets plus its net claims on the rest of the world. I'm assuming this is the sense that Nick Rowe is using as well.<br /><br />I am aware of the argument over whether base money should be treated as equity. It's a vaguely interesting question, but I don't think it's very important. It seems to me that it's just a question of the label you give it. I don't think it tells you any more about the role base money plays. In a sense, this was the motivation for my post. In worrying about how to categorise money, I think Nick is missing the point about the role financial balances play in the social accounting framework.<br />Nick Edmondshttps://www.blogger.com/profile/15342983814699700396noreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-17867040645379647882013-08-17T20:14:33.046-07:002013-08-17T20:14:33.046-07:00"Nick thinks that central bank money should n..."Nick thinks that central bank money should not be seen as a liability of the public sector, because it carries no right of redemption. In his view, it therefore represents net worth of the central bank. Whilst, there are some grounds for taking this approach, I think it is problematic, because it suggest that the gross wealth of the nation can be greater than its physical assets (plus net claims on the rest of the world)."<br /><br />Central bank money should be issued as equity not a liability. This way money is free to circulate without the implication that it has to return to issuer. The economy needs a medium of exchange. Also the people are the owners of the central bank if they created it therefore the money it issues to them shouldnt be lent to them. dannyb2bhttp://cmamonetary.orgnoreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-84686280100228660172013-08-16T00:36:18.767-07:002013-08-16T00:36:18.767-07:00That's good stuff. I've wondered about thi...That's good stuff. I've wondered about this issue, but haven't really come to any of my own conclusions yet. Your post is quite thought-provoking. Nick Edmondshttps://www.blogger.com/profile/15342983814699700396noreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-68353604733735919862013-08-16T00:01:21.819-07:002013-08-16T00:01:21.819-07:00I totally agree that your second model economy see...I totally agree that your second model economy seems a sensible stable arrangement. <br />Things can get messy though because those that hold lots of IOUs may actually want some of the grain growers to be unemployed so as to ensure that grain growers' wages can be bid down to reduce the general price level. That will cause IOU holders to be wealthier in real terms. Lost output due to unemployment will however also cause grain shortages and yet such insufficient supply of grain will not lead to price rises - it will instead lead to starvation of unemployed grain growers. <br />I've worried about this in the post:<br />http://directeconomicdemocracy.wordpress.com/2013/03/24/political-consequences-of-risk-free-financial-assets/stonehttp://directeconomicdemocracy.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-91480581597389784242013-08-15T13:29:05.285-07:002013-08-15T13:29:05.285-07:00Sorry - I don't know how to fix that. They sh...Sorry - I don't know how to fix that. They show for me even when I'm not logged in.Nick Edmondshttps://www.blogger.com/profile/15342983814699700396noreply@blogger.comtag:blogger.com,1999:blog-5362801348602268473.post-67903596022797498052013-08-15T06:11:47.477-07:002013-08-15T06:11:47.477-07:00The schematics aren't showing for me. Does an...The schematics aren't showing for me. Does anyone else have that problem?Anonymousnoreply@blogger.com