Given "spending is irrelevant"/fiat money, why not give every poor person 30K?

[l82start]

interesting side story on the baby torture topic, i took a test once, i believe it was a magazine questionnaire, on do you have what it takes to be a master spy...
the question that was my down fall and dropped my point count out of the qualified to be a great spy was .. if while under cover you saw somebody torturing or beating a young child/baby what would you do?, and there were several options to choose from multiple choice style... 






the master spy answer was "do nothing".  to get involved in somebody else's situation no matter how horrible it might seem to you, would put your mission and cover at risk, the great spy stays focused on his task...

[MachineGhost]

On a funny note, I've got to run to a rules committee meeting for HOA to decide on a problematic tenet at this moment. I wonder what philosophical principles I should apply to this situation. I think the guy who is causing all the infractions that haven't allowed his next door neighbor to sleep in over month is going to push for the "meta-ethical moral relativistic approach! LOL

Private property.  Libertarianism isn't morally relative as you want to believe.  I'm worried all that Marxist B.S. you appear to have been reading is screwing up your practical reality delineations.  Morality and philosophy are usually one of those B.S. mental topics where everyone twists themselves into a pretzel and nothing comes out the other end.

[doodle]

It's not that I am trying to create a rationale for an "anything goes" morality.  It's actually just the opposite--I find that a really useful moral code is something that guides your actions toward better outcomes as a result of a deeper understanding of your own beliefs.

Yes, but your expressions of your own beliefs or morality do not exist in a vacuum, they impact those around you. I think that you are simplifying the complexity of reality by trying to cram it into a libertarian code of ethics that might not fit with the natural reality of this planet.  Your ideas of "right" probably include the idea that the earth can be parceled up and divided up into individual plots. If you are a Native American living on that same piece of land you might think that particular morality of dividing up the earth to be absurd. Yet, if I were to come out in support of the Native American view of land, you would crush that idea. In other words, in that scenario you would be forcing your particular morality on me and dismissing my morality. That is not very morally relativistic.

[doodle]

Slotine,

I think he is saying that we are going about discussing things in a weird way :-)

I think that part of the confusion in your conversation is that Moral Relativism (to my mind at least) isn't in the same category of concepts as Consequentialism or Deontology. Rather than an approach to ethics, it is rather the absence of ethics. After all, ethics is a series of tacitly-agreed upon codes about right and wrong thoughts, words and actions. The moment this all becomes 'relative', is the moment when an ethic ceases to exist regarding that particular thought, word or action AT LEAST AT THE LEVEL OF THE SOCIAL UNIT YOU ARE DISCUSSING. For example, there may be an ethic against eating pork within a particular household. This ethic might extend farther into the community of Muslims. However, this ethic ceases to exist at the level of the United States (country).

The question becomes what happens when that Muslim family living in America tries to perform a genital mutilation on their 13 year old daughter? Is that child abuse or a morally relativistic cultural expression? Could you deal with that ceremony if the girls shrieks of terror were coming through your window? Would you smile and know that your morality regarding this was entirely relative, and continue to sip your tea and watch the evening news? I mean in all reality, what would you do? How would you face this situation? Your action I guess determines your philosophy....

[MediumTex]

It's not that I am trying to create a rationale for an "anything goes" morality.  It's actually just the opposite--I find that a really useful moral code is something that guides your actions toward better outcomes as a result of a deeper understanding of your own beliefs.

Yes, but your expressions of your own beliefs or morality do not exist in a vacuum, they impact those around you. I think that you are simplifying the complexity of reality by trying to cram it into a libertarian code of ethics that might not fit with the natural reality of this planet.  Your ideas of "right" probably include the idea that the earth can be parceled up and divided up into individual plots. If you are a Native American living on that same piece of land you might think that particular morality of dividing up the earth to be absurd. Yet, if I were to come out in support of the Native American view of land, you would crush that idea. In other words, in that scenario you would be forcing your particular morality on me and dismissing my morality. That is not very morally relativistic.

It sounds like you are doing a lot of speculating about what I might do in certain situations that I have never been in (and will probably never be in).

For me to make my way through life it isn't necessary for me to re-live every significant event in history and role play my way through it.

There are many situations I would prefer not to be in because I don't want to be the decision maker for others. 

I feel like you are taking a Honda Accord and pointing out that if you ran it up to the speed of sound it would disintegrate.  Who cares what it would do at the speed of sound if you never intend to drive it that way?

A code of morality doesn't need to survive every imaginable bizarre scenario you can conceive of to test it.  All it needs to do is get individual people who choose to follow it through the period of their lifetimes.

People can certainly find themselves in situations that are difficult where any possible decision seems to have serious moral problems associated with it.  If I choose to structure my life so that I am not in those situations too often it doesn't mean that I don't have a coherent morality, it just means that I prefer as few hassles as possible.

All belief systems, moral codes, and ethical structures break down under the right conditions (lack of sleep and food will dissolve most people's belief systems like paint thinner).  If you are skilled at avoiding those kinds of extreme situations, though, what is the point in lamenting that your Honda Accord may not be the perfect car because you can't take it underwater or into space?

[MediumTex]

The question becomes what happens when that Muslim family living in America tries to perform a genital mutilation on their 13 year old daughter? Is that child abuse or a morally relativistic cultural expression? Could you deal with that ceremony if the girls shrieks of terror were coming through your window? Would you smile and know that your morality regarding this was entirely relative, and continue to sip your tea and watch the evening news? I mean in all reality, what would you do? How would you face this situation? Your action I guess determines your philosophy....

But doodle, it isn't necessary for ME to decide what that family can do because there is already a social contract in place prohibiting that activity that the Muslim family knew about (or should have known about) before either coming here or choosing to stay here.

I don't have to get involved if there is already a law in place prohibiting something that I happen to also be opposed to.  It's sort of like I can delegate dealing with that issue to the state and I can focus my energy on other stuff.

The better example might be abortion, which some people find similarly offensive, but which is explicitly legal in most situations.

I find abortion to be an ugly and unfortunate decision that some people make and I wish fewer people made it.  The fact is, though, that I can't make people believe as I do on this topic (though I would always try to persuade someone not to do it) and I am not in a position to change the rules of society, so I don't let it weigh on me because there is nothing I can do about it.

It's sort like the idea that the U.S. should go step into every shithole anywhere in the world where a bad person is doing bad things and try to make him stop.  But what if there are more shitholes to go fix than there are resources to fix them? 

Taking all of the world's problems onto your shoulders is a frustrating way to live.

A single person can do a lot of good, but he can't fix every problem of humanity and he shouldn't have any illusions about this fact, and he shouldn't feel bad about not being able to fix a giant pile of problems that he had virtually no role in creating in the first place.

[doodle]

But doodle, it isn't necessary for ME to decide what that family can do because there is already a social contract in place prohibiting that activity that the Muslim family knew about (or should have known about) before either coming here or choosing to stay here.

I don't have to get involved if there is already a law in place prohibiting something that I happen to also be opposed to.  It's sort of like I can delegate dealing with that issue to the state and I can focus my energy on other stuff.

So laws that have been in existence since some arbitrary point are ok, but new laws made to deal with novel problems today are coercive?

People can certainly find themselves in situations that are difficult where any possible decision seems to have serious moral problems associated with it.  If I choose to structure my life so that I am not in those situations too often it doesn't mean that I don't have a coherent morality, it just means that I prefer as few hassles as possible.

Just cause you cover your eyes and ears doesn't change reality. Avoidance is not a reality for the people that have to face the problems that are too complicated for you to deal with.

MT,

I respect your position. Perhaps one day I might share it, who knows. For the time being I think our world views are in opposition. I will work in my small ways to improve society as will you. I will vote, as will you. Eventually, whether you like it our not we will all decide together where this one "Earth Ship" is going. We cannot all be the captains sailing off in our own direction as great as that sounds. While individual freedom is possible within the collective, ultimately we will be together when this ships either sails or sinks.

[MediumTex]

So laws that have been in existence since some arbitrary point are ok, but new laws made to deal with novel problems today are coercive?

All laws are coercive.  That's what makes them laws.

I'm just saying that if something that I am personally opposed to is already illegal, I'm probably not going to be all that concerned about it.  It's not that outlawing something is a perfect solution--it's maybe a "just good enough" solution that will allow my attention to move on to something else.

Just cause you cover your eyes and ears doesn't change reality. Avoidance is not a reality for the people that have to face the problems that are too complicated for you to deal with.

Actually, it does change reality.

Reality for each of us is based upon the assimilation of a finite set of ideas and data.  If I choose not to spend my energy and attention on ideas and data about hypothetical topics that I never encounter in my actual experiences, then it actually isn't part of my reality at all.

I'm just being explicit about something that virtually everyone implicitly does.  There are just too many problems in the world to get bogged down with ALL of them.  Perhaps the best example of this is the vexing problem of our own mortality.  Most people just choose not to think about this as they move through life, even though it is a problem that ALL people eventually have to face.

Harry Browne put it this way: If you want me to invest a portion of my limited resources in something you would like me to get worked up about, you must show me TWO things: First, you must demonstrate to me the truth of the matter you are wanting me to get worked up about, and second, you must demonstrate the relevance of that matter to me.

If something is true but not relevant, I am not going to invest a lot of energy into understanding it.  Why would I?

[Pointedstick]

doodle,

Everything's relative… it's all a social construction… but MG is right. You can discuss this stuff 24/7 and still not get anywhere. In the end, if you want to ever find some sort of closure and satisfaction, you're going to need to pick a moral code and follow it. Even though you'll know other people may have different moral codes, and even if it seems like it might not have all the answers, just make use of it in quiet satisfaction. If you find holes, adjust it. But trying to find a perfectly consistent moral code that perfectly covers all conceivable moral challenges is a fruitless endeavor.

There's a real trend in your thinking that you've revealed in this and other threads that you don't seem to be aware of, and I'd like to point it out.

You want to find a perfect morality. You want all humans around you to have a perfect outlook on life. You want a perfect economic system. You want a perfect world. You seem to be obsessed with discovering some imaginary perfection in the matters you choose to spend your brainpower on, and then you want everyone around you and indeed the whole world to agree with you on it.

There is no faster way to be dissatisfied with your life—no matter where you're at—than to be constantly seeking an impossible standard. And there's no faster way to repel others than by declaring that they need to change their attitudes to better match yours.

The world is flawed. Humans are consumptive predators. Morality breaks down in trying situations. But there's nothing you can do to change any of that. And if you keep attempting to find perfection, you're just going to find yourself more and more embroiled in conflict and dissatisfaction.

People who change the world are rarely the ones who set out to change it, and even fewer do it through argumentation or debate. Be the change you wish to see and watch in amazement as people flock to you. Or, you can annoy and repel them by declaring the rightness of Karl Marx and arguing yourself in circles about the relativity of relative morality. The choice is yours.

[doodle]

Pointedstick,

I agree. But the reality is that you live under a system of coercive morality right now. And that is never going to go away. It will continue to change and adjust to the times. That is reality. This system is always going to be filled with legislation, either good or bad.

Everyone is free to have their own morality in their heads, but in society you are forced to conform to the norm whether you like it or not. If you don't like the results of the norm's behavior or its morality you have to get in and fight, or just give up and move to Alaska.

[Pointedstick]

Pointedstick,

I agree. But the reality is that you live under a system of coercive morality right now. And that is never going to go away. It will continue to change and adjust to the times. That is reality. This system is always going to be filled with legislation, either good or bad.

Everyone is free to have their own morality in their heads, but in society you are forced to conform to the norm whether you like it or not.

AND I CAN'T CHANGE THAT!

So I don't try. Because if I did, I'd be an unhappy, frustrated person. I prefer happiness and satisfaction, so I accept the world as it is and make as good of an attempt as I can to be happy and help others be empowered and find their own happiness, because those activities give me happiness too.

I'm not saying you have to be like me. I'm saying that doing this gives me happiness, and since I want to see you happy too, I'd like to present another option to endlessly debating meta-normative ethics. You don't have to follow me and I can't make you. But please doodle, be happy. Let go of your anger!

[MediumTex]

Pointedstick,

I agree. But the reality is that you live under a system of coercive morality right now. And that is never going to go away. It will continue to change and adjust to the times. That is reality. This system is always going to be filled with legislation, either good or bad.

That is your reality.

Everyone is free to have their own morality in their heads, but in society you are forced to conform to the norm whether you like it or not. If you don't like the results of the norm's behavior or its morality you have to get in and fight, or just give up and move to Alaska.

No.  People are free to have their own morality and act upon it in everything they do.

You are not forced to conform to any norm of society.  If you conform it is because you have chosen to conform.  People choose not to conform all of the time, though sometimes they don't like the consequences very much.

[doodle]

I'm not angry at all. Really. One last hypothetical before I put this to rest.....for a long time.

We are all together on a ship in the middle of the ocean. We are a bit lost and no one really knows where we are headed. I have a sneaking suspicion based on my calculations that if we continue in the direction we are going, we are sure to run the ship into a group of coral reefs. A few others agree with me. Others on the ship think that we are doing fine and should maintain our course because my way is actually going to result in certain doom. Ultimately the majority is going to decide the direction this ship takes.

I can't take over the wheel by force without killing a bunch of people so my only option is to start debating and talking about things to try to convince the others. Hopefully through some logic or persuasion I can convince a few to come over to my way of viewing things so we can assume majority control and steer the ship in a different direction.

Where would you, PS and MT, be during this situation? Tanning out on the bow? Playing cards in your bunks? Would you jump of the ship and start swimming?

I'm just curious how you view this situation?

[Pointedstick]

Are you correct in your assessment? I'd be off trying to verify the truth of your claims, not playing cards or trying to convince people. If I found to my satisfaction that you were right, and the majority agreed with you, then I would go play cards. If I thought you were right but the majority opposed you, I'd help you make the case to them, but if we couldn't budge 'em, I'd prepare myself, my family, and my friends for the crash in any way I could. If I found that you were wrong, I'd be doing the opposite.

In no event would I kill people to try to take control of the ship. After all, what if I was wrong in my assessment of the truth of the claims? I'm not infallible, and you can't call back a bullet.

[MediumTex]

I'm not angry at all. Really. One last hypothetical before I put this to rest.....for a long time.

We are all together on a ship in the middle of the ocean. We are a bit lost and no one really knows where we are headed. I have a sneaking suspicion based on my calculations that if we continue in the direction we are going, we are sure to run the ship into a group of coral reefs. A few others agree with me. Others on the ship think that we are doing fine and should maintain our course because my way is actually going to result in certain doom. Ultimately the majority is going to decide the direction this ship takes.

I can't take over the wheel by force without killing a bunch of people so my only option is to start debating and talking about things to try to convince the others. Hopefully through some logic or persuasion I can convince a few to come over to my way of viewing things so we can assume majority control and steer the ship in a different direction.

Where would you, PS and MT, be during this situation? Tanning out on the bow? Playing cards in your bunks? Would you jump of the ship and start swimming?

I'm just curious how you view this situation?

I would want to learn more about the basis for your beliefs.

If I found it persuasive the others might as well.

[Gumby]

OK for all of you who say the US has fiat money, and Omama/we can spend all we like, why not give every poor person 30K (or pick some number)?

I presume there is some reason why this is not feasable, so explain to me why we can keep spending more and more and there is no problem, but what I suggested is not.  Where is the line and how are you drawing it?

Sooo...... Getting back to Benko's original post.

Cullen Roche wrote the following post on how much larger the budget deficit would have to grow in order to get everyone back to full employment. So, the answer to the question, "Where is the line and how are you drawing it?" is answered in the following post:

PragCap: How Much Larger Could the Budget Deficit be?

Let’s first remember that inflation becomes an issue when we spend in excess of productive capacity.  What’s our productive capacity?  We can use the output gap as a rough estimate of lost potential from the Great Recession.  If we use Okun’s Law we can assume that excess unemployment causes a ~2% output gap.  We currently have about a 7.5% output gap (potential GDP vs actual GDP) and 7.7% unemployment.  Let’s assume we’re going with full tax cuts and a multiplier of 1.  That’s pretty safe and conservative (in more ways than one).  Let’s also use the full employment rate of 4% as defined by the Humphrey Hawkins Act.

If it takes $320B in GDP (1% of current GDP is $160B) to close the unemployment rate by 1% then we need a deficit of about $1.2T to get us back to full employment and on the path to closing the output gap.  That means we’re currently headed in the wrong direction with the current budget proposals which are likely looking at something in the $500-$600B in deficits for next year.  In short, we either need the private sector to really pick up the slack here (and the outlook is improving, but still weak) or we need the government to pick up more of the slack (which it obviously isn’t going to do).

Welcome to the math on muddle through.  Enjoy your (unemployed) stay.

Source: PragCap: How Much Larger Could the Budget Deficit be?

And as Cullen points out, this number doesn't have to be "spending" since the deficit can be increased through tax cuts.

[doodle]

I continue to believe that there is another way to tackle this unemployment problem in a more sustainable and ecologically healthy way by reducing work hours rather than coming at this problem from more conventional economic thinking which usually attempts to increase aggregate demand through stimulus. Besides...who made the arbitrary decision that a "workweek" is constituted by 40 hours on the job? How did that get written into the cultural psyche? Why can't that be changed?

I've been looking at alternative proposals to fix unemployment by shortening the work week it seems many others are thinking down this same path.

Economist Dean Baker from the Center for Economic and Policy Research for example thinks this is a possible solution that merits attention. http://www.youtube.com/watch?v=fJsafAWztMg

http://www.pbs.org/newshour/businessdes ... kweek.html

Question: Why doesn't the federal government stimulate the economy by reducing the length of the workweek (the number of hours after which employees receive time-and-a-half pay)? Employers would respond by spreading the work load, which means more hiring and fewer layoffs.

Wouldn't that be more efficient overall than high unemployment? By tying the length of the work week to the unemployment rate using an automatic formula, a feedback loop could be set up to keep unemployment at a reasonable level.

Paul Solman: Because it would seem too radical? Too kooky? Because it wouldn't distinguish between more and less able workers? And yet, maybe not such a hare-brained scheme. Another friend of this page, Dean Baker, wrote the following in the New York Daily News in January:

"One innovative policy that would provide a quick boost to the economy and jobs - and lasting gains in reduced unemployment - is a tax incentive for shorter workweeks or work years.

No doubt, such a suggestion will make conservatives howl about liberals attempting to turn the United States into France, where in 2000 the government mandated a 35-hour workweek.

But I'm not suggesting the government force a shorter workweek; I'm suggesting it create incentives for businesses to make the choice themselves.

And in any event, there are worse examples to follow than France's on this score. The reduction in the workweek there created new jobs and improved productivity.

Incentivizing a shorter workweek in the U.S. could take different forms. To qualify, an employer who currently provides no paid vacation might offer all workers three weeks a year of paid vacation, approximately a 6% reduction in work time. Alternatively, employers could cut the standard workweek, say from 40 hours to 36 hours, a 10% reduction in work hours. Or they could offer paid sick leave or paid parental leave.

How would this help the economy? The tax break would allow the employer to compensate workers for fewer hours up to some limit, say a maximum of $2,500 per worker. That would cut work hours but maintain staffing levels.

As a result, workers would be getting just as much money as before the reduction in hours - but putting in 10% fewer hours. If workers have the same amount of money, then demand in the economy will be the same. At the same time, firms would then need to hire more workers to meet this demand, since they would be getting 10% fewer hours from each worker.

Such a tax break would stay in effect for just two years. However, if workers and employers liked the new work schedules, there would be a lasting benefit from this job creation measure."

The below is written by Juliet Shor whose new book "Plentitude" even got a thumbs up from Jacob over at ERE. This point of view would require a culture shift to be sure, but as a child of baby boomer parents, I look at that generation with disbelief about the unbelievable size of the debt fueled consumption that went on for nearly 30 years. The fact that private debt to GDP numbers were driven to record high levels (twice that of what they were during the great depression) only underscores how unsustainable this era was.

So far, the conversation about how to transform this economic model has been stuck in neutral. Traveling around North America discussing my new book, Plenitude, I am increasingly convinced that a key obstacle to moving forward is a lack of confidence that there is another way. To gain that confidence, we need to articulate a model of how a sustainable economy could work.

The core insight of my model is the need to transform how people spend their time. Its first principle is to reverse the increase in time devoted to the market that has occurred in recent decades. (The US, most of the global South and some OECD countries have experienced rising hours.) In the US, annual hours of work rose more than 200 from 1973 to 2006. Longer hours raise the ecological footprint, both because of more production, and because time-stressed households have higher-impact lifestyles. Getting to sustainability will require slowing down the pace of life, which means working less.

Shorter hours are also key to solving the unemployment crisis. In the US, it will require 11 million new jobs to return to pre-crash levels. That breaks down to 500,000 new jobs a month for almost two years. That’s an unrealistic number, unless we address hours of work. In comparison to Western European countries, where hours are much shorter, the U.S. has to generate between 6 and 20% more in Gross Domestic Production to create each new job.

The recession has gotten us started down this road. When it began the workweek stood at 33.3 hours, but by April of 2010 it was 34.1. A rising workweek is a strong desiderata of recovery for mainstream economists, but they fail to see that it makes job creation harder, contributes to stress among employees, and exacerbates ecological degradation. Declining hours could re-balance the labor market and free up time for people to engage in low-impact, self-providing activities that reduce their dependence on the market. These include growing food, generating energy, building housing, and making small-scale manufactured goods, such as apparel and household items.

This do-it-yourself activity is highly satisfying for people, because it helps them learn new skills and allows them to be creative. It also turns out to be the catalyst for start-up businesses and second careers as people take their newfound skills and passions and earn money with them. Freeing up time from the formal market is one condition for incubating a green, small business sector. Self-providing is also part of how we can construct more economic interdependence. As people begin to do more self-providing, they barter, trade, and share on a local level. This builds wealth in social capital, which enhances well-being and security.

Finally, the fourth principle of plenitude is that people will consume differently. With more time and less disposable income, they’ll shift to buying fewer new products, and prefer goods that are longer lasting and repairable. They’ll also participate more in economies of re-sale and exchange. I call that “true materialism,”? a consumer practice that respects the materiality of the earth.

Perhaps the most important dimension of plenitude, in contrast to the dominant discourse on sustainability, is that it is not a techno-fix. We do need to change the technologies we use, especially in the energy sector. But this model shows us that we can move a long way toward sustainability by focusing on how we spend our time and organize our economic lives. Shifting to slow, small-scale, low impact ways of living and producing can yield dramatic reductions in footprint, even without new technological systems.

[Pointedstick]

doodle, you keep wanting to change everyone around you.

How did that get written into the cultural psyche? Why can't that be changed?

Finally, the fourth principle of plenitude is that people will consume differently.

Why this obsession with reshaping society? What if people refuse to consume less and continue to buy toys and gadgets and cars? What if society doesn't like your changes? At what point would you be willing to concede defeat? Or would you keep pushing, sure that someday society will see the wisdom in your changes?

[doodle]

Pointedstick, please lets not go down this path again. I posted a legitmate economic solution to unemployment that falls outside of the framework of what mainstream economics is proposing. Lets address that please instead of focusing on me. Maybe cultural psyche is the wrong word to use, but the 8 hour workday is a remnant from the industrial revolution. Workers back then fought to have workdays shortened from what were 12 to 16 hours. Maybe it is time to reevaluate the 8 hour workday and change it to six. As the economist said in the article this would require minor tweaking of the present labor laws.

Is this solution too outlandish? "By tying the length of the work week to the unemployment rate using an automatic formula, a feedback loop could be set up to keep unemployment at a reasonable level."

[Pointedstick]

I guess I just don't think it will work. Any economic plan that relies on changing human desires rather than being responsive to them is doomed to failure.

Even if you could somehow lower people's workweeks without reducing their take-home pay, could you get them to consume less? In a debt-based monetary system where banks practically throw credit cards at toddlers, I think not. In fact, we've seen over the last 30 years that people have consumed more as their paychecks stagnated, which is why private sector debt is so absurdly high (like 250% of GDP or something ridiculous).

[doodle]

doodle, you keep wanting to change everyone around you.

How did that get written into the cultural psyche? Why can't that be changed?

Finally, the fourth principle of plenitude is that people will consume differently.

Why this obsession with reshaping society? What if people refuse to consume less and continue to buy toys and gadgets and cars? What if society doesn't like your changes? At what point would you be willing to concede defeat? Or would you keep pushing, sure that someday society will see the wisdom in your changes?

All of the rules and regulations that we have in place presently are created with the intent of "reshaping society". Without these, the marketplace would function much differently than it does presently. I dont think that you can argue that the present manifestation of society is not already shaped. If that is the case, why is this present shape of society any more valid than another?

[doodle]

I guess I just don't think it will work. Any economic plan that relies on changing human desires rather than being responsive to them is doomed to failure.

Even if you could somehow lower people's workweeks without reducing their take-home pay, could you get them to consume less? In a debt-based monetary system where banks practically throw credit cards at toddlers, I think not. In fact, we've seen over the last 30 years that people have consumed more as their paychecks stagnated, which is why private sector debt is so absurdly high (like 250% of GDP or something ridiculous).

Pointedstick, this is where you and I differ. You also have to take into account that I believe that there are some ecological issues that are not being addressed by the present economic system. I dont think you can take the life sustaining environment out of economic models and equations. With regards to the banks and credit, that is what got us into this mess in the first place. How did we end up with private debt as high as it is today? Obviously something got out of whack. I think that going forward it is important that economics begins to think more about the long term sustainability of the system and how the system can be regulated to foster this. Big boom and bust cycles and long term environmental degradation can be dealt with in my opinion through proper policy. This is really what keynes was striving for before he died of a heart attack and other economists corrupted his theories.

Humans have many desires that are inhibited by laws....from speed limits, to what constitutes a sexual minor.

[Pointedstick]

I don't deny that society is shaped by government and laws and regulations; what I deny is that any one person personally possess the moral wisdom and knowledge necessary to reshape it. Society moves slowly as attitudes change among the people who constitute it. Historically, most attempts to radically change people's attitudes for them have ended poorly.

You can change the rules, but you can't change people's attitudes. And attempting to change people's attitudes by change the rules may not produce the attitudinal changes that were expected or desired. Humans are complicated, contradictory creatures. It's not so easy as tweaking a variable in some grand economic equation; central economic planning always results in different outcomes from what the planners expected.

I probably agree with you that the debt-based monetary system we live in is a nutty one, and incentivizes consumption beyond one's capacity to produce. But I see no good method to change it on a grand scale without risking even worse damage in the process. Societies are terribly stressed by rapid change, and the chaos of that upheaval usually proves to be a fertile breeding ground for tyrants and dictators.

[doodle]

Slotine,

Is there any particular reason that you can think of why the 8 hour workday has stayed the same since the beginning of the century? The work week had been gradually declining since the beginning of the industrial revolution and then despite huge increases in productivity it hasnt budged in nearly a hundred years. That just causes me to wonder.

[Pointedstick]

Humans have many desires that are inhibited by laws....from speed limits, to what constitutes a sexual minor.

Perhaps this is the root of our disagreement. I don't believe that laws inhibit desires; rather, I think laws punish behavior. Laws will suppress outlawed behaviors to the extent that people believe they will be caught for violating them, but laws are no mental impediment for those who do not believe they will be caught, and in no case does any law actually change anyone's underlying desire.

If I make alcohol illegal, I have not changed people's desire for alcohol. I have merely sent the state on a quest to imprison those who transform their desires into behavior.