Sunday, September 10, 2017

Horse manure on the universal basic income

Modeling the MacroeconomicEffects of a Universal BasicIncome

We went through the pass through issue, interest charges and consumer markuos go hand in hand.

The Levy model which is used to predict expansion assumes everyone maintains stationary transactions.  Thus they conclude, assuming term debt, that government can incur a smaller liability up front and low income consumers will get a gain while the economy adapts.

But we have looked at consumer mark ups and the ratio of swamp debt to the economy.   When government debt offers higher margins, consumer distribution shuts if it cannot compete.  We end up with greater monopoly power, as a general rule the more of the economy that passes through swamp hands, the greater the concentration of monopoly power.

Let us reproduce the charts:

 The top is interest  as a percentage of GDP.  The bottom are the mark ups.  

The Levy model used assumes stationary wants and desires stable over time.  The chart says business ignor time, they look at the gain from government bonds and will set their mark up to match, almost immediately or at least much faster than stationary statistics would suggest.

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