Tuesday, July 26, 2011

This makes sense to me

This makes sense to me; mostly. I don't buy the "we should spend more to reduce the deficit"-notion and I think the interviewers are too opinonated. But what is said by Mr. Stiglitz sounds mostly plausible to me.

But I'm sure there are some nobel prize winning economists, who say the opposite. If somebody got a link, I'd love to watch/read.

Interview starts at 13:00
The article in question.


  1. Dear Nils. I miss your MMO design rants. Sincerely -

    Syl =)

    p.s. I think political discussions are very interesting too. still!

  2. It's hard to rant about something you don't play. But thanks.

    MMO rant just for you:
    I don't get what's so bad about $150 MMOs. Just buy the cheaper version, stupid. ;)

  3. LOL...
    and I beg to differ very much here - "It's hard to rant about something you don't play" - it takes exactly that visionary kind, analyzing from a distance for a better future! you know you want it! ;)

    Hehe, in any case, keep going on whatever it is; I find these reads interesting, although I don't necessarily comment so much as on other topics (political discussions scare me that way).

  4. I miss the mmo stuff as well. Heck, you could do what syncaine did and write a series of posts about your perfect mmo.

    I'm also much less likely to comment on political stuff because I'm nowhere near as well informed as I'd need to be to feel comfortable offering my opinions. :)

    But is all interesting either way.

  5. You think the economy would do better with less money being pumped into it?

    Remember this post of yours a while ago talking about Activision Blizzard and how they were simply giving money away instead of investing it? If Activision Blizzard had debt (they don't), that would have been the time for them to start paying it down. Not when they were living off of the equivalent of Lost Vikings and Rock n' Roll Racing. The US has had periods of economic growth ~15 years ago, and that would have been the time to pay things down.

    Of course, the irony is that profits are actually up, wealth (at the top) is up, and we have just as much of an opportunity to pay shit down now... just not across every economic class.

  6. No, Azuriel, I think that the boost in econony that comes from more government spending doesn't make up for the deficit that it causes.

    Just like I think that lowering taxes is a (smaller) boost for the economy that doesn't make up for the deficit that it causes.

    Both are dangerous ways to argue. They might be correct occasionally, but if it were soo simple to restore finances, few states on earth had debt.

  7. Have a look at Richard Koo's work (Namura institute) where he compares the Japanese recession to the current position in the West.

    This is perhaps the most compelling evidence for increased public sector spending I have seen.

    Definitely worth a look.

  8. Among economists the idea of deficit spending is highly debated (and has been for quite a while.) You will find extremely well-written by highly decorated economists for both sides of the argument (as is common in economics, alas.)

    The whole issue is far too complicated for an armchair-economist like me to fully grasp and stretches far beyond the simple idea of "spend money to improve economic growth."

    Back when I read up on the issue for my thesis, I actually found the Wikipedia article a good point to start for an overview and terms to look into for further information.

  9. That's my point Scrusi: there are very good economists for who argue against it and very good economists who argue for deficit spending.

    Now, if US had a debt of <50% of GDP, I'd say, let's try it.

    But with almost 100% of GDP in debt it's just too risky, in my opinion. Sure, it might work, but it also might push debt to over 150% of GDP and more - see Japan.

    You also need to consider that the deficit spending could not be focused. Instead, it would need to be a compromise, just like the (rather small) $800 billion package Obama passed in the beginning of his presidency. It included 40% of tax cuts - which are quite ineffective at 'jump starting' the economy. That's not just my opinion, but the opinion of the supporters of deficit spending.

    Ad when has deficit spending last reduced a deficit ? WW2 ? Even if that were true, nowadays economy is very different from that 70 years ago.