Hi Mark, you make a very excellent point. I think we've seen that the lags on so many of these tax type
information flows are long enough that no one can know in real time the actual composition of tax receipt inflows
from the different sectors of the economy. Also there are tremendous lag times in trying to determine how savings
rates are being impacted by the private, govt. and corporate sectors.
We have an excellent example on a somewhat parallel track of the uncertainty of how much stimulus to
the parts of the economy, the very large percentage decline in Central Bank Interest rates, is creating.
We have the obvious counterbalancing aspect of an economy which has had excessive capital investment,
particularly in certain sectors (Telco, technology) and due to the high debt levels. These companies can not
take advantage of lower funding costs that the banks can, and also they just have excess capacity that needs
to disappear. That's a Darwinian, contracting process and there is not an effective way to change that.
More importantly, Classical Economics states that you don't want to allievate the suffering and downsizing in
sectors where there is too much capacity, and capital has been "squandered" by creating much more supply
than demand.
At times we need to remember to be respectful for the processes in which our capitalist system works and
not expect it all to be easy. I think it's very much like being appreciative and respectful of God and the World
he's created. We see old age and Death, and we realize it's part of the God's Grand Design.
We should have respect for that and not think that we are above the grand Design, to do so would be Hubris.
And the Greeks were famous for saying that Hubris (exaggerated pride or self confidence) is the fall of Man.
If I could bear witness to anything, it's that I don't understand the process completely, by any means. But I'm
in Awe of it, and I respect the many sublime attributes of it and our larger universe..
John
---- the Hubris quote from Tom Wallace of Bankers Trust...... |
