Great post. This refinement really makes the debt jubilee practical. But is there a way to prevent the over-creation of private debt in the future, or do we periodically have to do this jubilee? There is a moral hazard if everyone knew they could load up on debt and get bailed out later. Or is the solution in some form of bank regulation? That is also a lot of interest payments to make. Could that be inflationary?
With regard to the issue with limiting mortgages to an imputed rent multiple, haven't costs all risen for building a home, from materials to labor to regulations? How do we deal with those inputs that are now baked in at these levels while limiting mortgage financing? Should the limit only apply to existing homes?
It would go hand in hand with regulations to prevent Ponzi financing in future--The PILL and a range of other policies to encourage lending to businesses and entrepreneurs. But the debt level would also turn up as a policy target for government.
A 50% Discount/Rebate policy at retail sale transforms chronic erosive inflation into beneficial price and asset deflation...by increasing the money supply with Monetary Gifting. Milton Friedman turns over in his grave. Make the discount permanently 52% that enables enterprise the freedom to potentially increase their prices by 2% per annum, also index the Discount/percentage to an honest assessment of monthly inflation and then tax any revenue enterprise may or may not gain from inflating further at a rate of at least 100%. Finally, create The Department of Competition, Innovation and The Public's Bully Pulpit that has weekly press conferences that points the finger at greed inflaters and asks consumers what they are going to do about such anti-social behavior that erodes their purchasing power.
What economists like Richard Wolfe et al keep repeating is that it is not the international debt per se that is the problem it is the interest payments that come out of tax revenue and compete with medicare, social security etc. I think this is BS, but they keep repeating it. Why, What is going on? Am I missing something. Can't they just issue new bonds to pay off the old ones? Isn't that what they have been doing. If they keep doing this will the Chinese and Japanese get suspicious? Is this a Ponzi scheme or something else. Surely countries can't be in deficit forever. Nothing lasts forever and things that can't don't. I'm confused.
Interesting stuff. Do you think this would be possible for small countries (e.g the UK) or only for the USA as the global reserve currency. If done in the UK, how it would affect things like the exchange rates against the dollar and the euro and any private debt denominated in other currencies?
Your systemic analysis is as usual spot on. However, if you would analyze conceptually/paradigmatically you would see that a policy of a 50% Discount/Rebate at retail sale where either the government or the central bank simply creates money with Strategic Monetary Gifting to rebate and make retailers whole on their full price (especially at the retail point of finance, that is one's car, mortgage or other big ticket item) you implement permanent debt jubilee instead of a one off jubilee and then let Finance go right back to screwing up everything for another 60-70 years with their present monopoly paradigm for the creation and distribution of all new money. Would you please consider modeling the effects of the above policy and the entire policy program in my book here: https://www.amazon.com/Wisdomics-Gracenomics-New-Monetary-Paradigm-Policies-ebook/dp/B0C49B9PX7/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1552358772&sr=1-1-catcorr
Great post. This refinement really makes the debt jubilee practical. But is there a way to prevent the over-creation of private debt in the future, or do we periodically have to do this jubilee? There is a moral hazard if everyone knew they could load up on debt and get bailed out later. Or is the solution in some form of bank regulation? That is also a lot of interest payments to make. Could that be inflationary?
With regard to the issue with limiting mortgages to an imputed rent multiple, haven't costs all risen for building a home, from materials to labor to regulations? How do we deal with those inputs that are now baked in at these levels while limiting mortgage financing? Should the limit only apply to existing homes?
It would go hand in hand with regulations to prevent Ponzi financing in future--The PILL and a range of other policies to encourage lending to businesses and entrepreneurs. But the debt level would also turn up as a policy target for government.
Nothing of real and lasting consequence happens in the temporal universe and in the minds of mankind...until they change their ideas.
And the most important ideas to change are the APPLIED ideas also known as paradigms.
A 50% Discount/Rebate policy at retail sale transforms chronic erosive inflation into beneficial price and asset deflation...by increasing the money supply with Monetary Gifting. Milton Friedman turns over in his grave. Make the discount permanently 52% that enables enterprise the freedom to potentially increase their prices by 2% per annum, also index the Discount/percentage to an honest assessment of monthly inflation and then tax any revenue enterprise may or may not gain from inflating further at a rate of at least 100%. Finally, create The Department of Competition, Innovation and The Public's Bully Pulpit that has weekly press conferences that points the finger at greed inflaters and asks consumers what they are going to do about such anti-social behavior that erodes their purchasing power.
What economists like Richard Wolfe et al keep repeating is that it is not the international debt per se that is the problem it is the interest payments that come out of tax revenue and compete with medicare, social security etc. I think this is BS, but they keep repeating it. Why, What is going on? Am I missing something. Can't they just issue new bonds to pay off the old ones? Isn't that what they have been doing. If they keep doing this will the Chinese and Japanese get suspicious? Is this a Ponzi scheme or something else. Surely countries can't be in deficit forever. Nothing lasts forever and things that can't don't. I'm confused.
Interesting stuff. Do you think this would be possible for small countries (e.g the UK) or only for the USA as the global reserve currency. If done in the UK, how it would affect things like the exchange rates against the dollar and the euro and any private debt denominated in other currencies?
Your systemic analysis is as usual spot on. However, if you would analyze conceptually/paradigmatically you would see that a policy of a 50% Discount/Rebate at retail sale where either the government or the central bank simply creates money with Strategic Monetary Gifting to rebate and make retailers whole on their full price (especially at the retail point of finance, that is one's car, mortgage or other big ticket item) you implement permanent debt jubilee instead of a one off jubilee and then let Finance go right back to screwing up everything for another 60-70 years with their present monopoly paradigm for the creation and distribution of all new money. Would you please consider modeling the effects of the above policy and the entire policy program in my book here: https://www.amazon.com/Wisdomics-Gracenomics-New-Monetary-Paradigm-Policies-ebook/dp/B0C49B9PX7/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1552358772&sr=1-1-catcorr