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Strategies & Market Trends : ahhaha's ahs

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To: frankw1900 who wrote (2267)	5/16/2001 2:04:51 PM
From: ahhaha	Read Replies (1) of 24758

You can sight whatever sources you wish, but I heard him at UCB 30 years ago state that taxes should be used to control government debt. But I don't think he believed in sock it to em taxation or unlimited debt. He was of the opinion that government share of GDP more than about 25% was crippling but did believe governments should vigorously manage that ~25% to fit policy ends. Just how does government "manage" the debt? Government must incur a debt to manage. Minsky thought government should actively maintain a sizable debt in order to realize presumably other desirable aspects of economy. The idea was that widows and orphans need protected income and what other vehicle could deliver that but treasury debt? He certainly was not a believer in social programs. His intent was that the debt would provide a protected class of investable securities presumably immune to the supposed chaos of financial markets. Yet the existence of the debt creates an environment of volatility rather than of buffering against change, because it raises the uncertainty of financing. Government debt doesn't crowd out, but it does create uncertainty. Minsky's debt management is just another veiled social program. You should realize that like a lot of '60s university socialists who advocated the destruction of free market capitalism because it was an inferior system(it is no system), Minsky changed his spots. What else could they do? Even though during the '70s they fought vehemently to prove the superiority of socialism, every economy in the world was gradually refuting them by real experiments in the field.

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