Thursday, July 14, 2016

Japan, get some price discovery

It is helicopter time in Japan, I have heard, money permanently lost in the economy.  OK, but do the transaction up front, have your society take a stab at the future price of life.  Here is my suggestion:

3% per year debt jubilee for government. 3% cut in current and future pension, and a 3% sales tax hike, a 3% upward tilt in the progressive tax table.. Then, for stimulus, a big government check for each new baby. The contract subject to legislative risk.

Absent a deal, the result of the helicopter is to push the curve right, everyone piles the money and waits for a deal.  Price discovery is fundamental, absent discovery the double entry accounting system fails.  The legislature has to take play a card to generate betting possibilities..

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