Friday, October 28, 2011

Why BOnomics Sucks

Allan H. Meltzer: Four Reasons Keynesians Keep Getting It Wrong - WSJ.com:

Short and sweet ... here is my REALLY short and sweet version, but his is a bit more "educational". Why or why do so many people not understand this????

1). Current high deficits promise higher taxes or inflation in the future (if you run up your credit card, you have to pay it + interest in the future)
2). Redistribution to non-workers is a less optimum asset allocation than distribution to workers so you have less overall. ( if you drink your beer from a lawn sprinkler vs a can, you get less)
3). Regulations are painful ... and uncertainty about them is painful too. ( Making you walk on broken glass today is painful, promising to nail your feet to the floor in the future doesn't make it any better)
4). Short term fixes are short term fixes ... Going out for an expensive dinner and getting drunk if I lose my job may make me feel better tonight ... but in the AM, not so much.

'via Blog this'

No comments:

Post a Comment