Saturday, April 8, 2017

Politely discussing senate bankruptcy at the NYT

The Economy May Be Stuck in a Near-Zero World

JUSTIN WOLFERS at the NYT explaining low growth in units of the US tax dollar. He uses all the theory of magic central bank monopoly to force time synchronization for rate fixing.

In the sandbox, his variables get collapsed into government insuring currency risk which accumulates. And as the CBO and the balance sheet show, government is a bankrupt insurance agent. It is enough to notice that one member bank has a guarantee against bankruptcy thus having 2.4T in loans and 200B in deposits. The proper sandbox model will show the central banker losing market share to other currencies, and thus the senate executing adjustments, like bond defaults and market pricing of their programs, so as to restore market share for the tax dollar.  Governments no longer allowed to fiddle with the accounts (as much) .

So, the sandbox is absolutely neutral about government acknowledging losses more often than once a generation. And the sand box will, over the longer sequence, give government a C grade, simply because it exists and has some perceived merits. Government will be crappy more often but in smaller amounts, we get it.

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