More Steve Keen

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Damnthematrix's picture
Damnthematrix
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More Steve Keen
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Matt Holbert
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Re: More Steve Keen

I think that this is terrible advice. 

First of all:

"The last thing the US needs is to have all its banks run like the Amtrak national passenger train network or, worse, the US Internal Revenue Service."

It has to be recognized that corporations are every bit as incapable as the government.  As William Ophuls pointed out in one of his books, for-profits have a distinct advantage over non-profits.  They can lobby and write off their expense -- along with just about every expense.  I once was hosted by UBS at their offices in Manhattan.  Although I had already had lunch with another entity who was attempting to get a shot at managing money for the pension fund that I represented, UBS had a buffet of food laid out that must have cost $2000.  The employees loved the fact that I had already eaten.  They got to eat a tasty lunch that was a write-off.  We have to stop thinking that there is an existing institution -- say big corporations -- that are better at running things than the government.  Both the government and big corporations have proven that they are incapable.  We need to have new institutions that are what I call for-flow institutions and we need to switch immediately away from income tax to carbon taxes.

 Secondly:

"The idea of modifying mortgages appalls legal purists as a violation of the sanctity of contract."

What if you are someone who recognized that there was a bubble and sold your home in 2006?  Modifying mortgages penalizes those who think.  This asset bubble must deflate on its own without government intervention.   

 

 

Damnthematrix's picture
Damnthematrix
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Re: More Steve Keen

Are you debt free Matt?  Because if you are (like us), I'd say "well that's alright for you..."

Just what do you think will happen to all those people who end up underwater?  If banking institutions end up with millions of properties they either cannot sell, or cannot sell except at huge losses, what is the point of the mortagees being homeless? They might as well have stayed with 'modified mortgages'.

Personally, as I have expressed many times on this site, debts should just be cancelled.....  and I already well know how much this "appalls legal purists as a violation of the sanctity of contract."!

At least if you approve of Carbon Taxes as an alternative to Income Taxes you are half way to being on the same page as I am.  Consider this:  we need a completely new system, whether it's run by governments or corporations is another argument, and I'm not sure what you mean by "for-flow institutions".  Personally I'd like to see this new system as a decentralised one run by communities.  It could be construed as decentralised communism, I'm still getting my head around what this could be like, it is a HUGE mind shift, however it turns out.

With the banks shut down (so no more money can be created) and the debts cancelled (so growth is no longer required) we could then concentrate on rebuilding civilisation in a sustainable fashion at a localised level, using the ALREADY EXISTING CASH. 

Now if you have a better idea, or would like to build on these notions, maybe you could rejoin  http://www.peakprosperity.com/forum/what-if/9651

Mike 

Matt Holbert's picture
Matt Holbert
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Re: More Steve Keen

I happen to be debt-free, but realize that the current system does not encourage it.  In my capacity as an asset manager of an institutional portfolio in the 80's, I dealt with a massive devaluation of home prices and commercial real estate prices primarily in Texas.  We should allow prices to fall just as they did at that time.  Some properties will fall down or be torn down.  Maybe 15-20% of homeowners will become renters.

I once wrote that maybe society should have a hiatus on all payments for a period of time.  During that time, everyone but those who provided essential services would have the opportunity to spend time in the library and find out just how screwed up we are.  Obviously, this is impossible because most would simply sit at home and watch dvds -- assuming that all of the broadcasters shut down their shows.  This thought experiment gets to the heart of our predicament: in general, we are not developed enough to deal with the complexity of our situation. (Kegan, In Over Our Heads; Tainter, The Collapse of Complex Societies)

So... whatever we do in the short run has to be something that doesn't require a high level of personal development.  Over the years, I developed a comprehensive plan but the response to it would indicate that either I was completely off my rocker or the plan was too subtle.  I finally closed the blog -- to the public, at least -- on which the ideas were posted.

I'll take some time and review the comments on the what-if forum.  If I think that I have a better idea, I'll post. 

Damnthematrix's picture
Damnthematrix
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After our Economic Dunkirk
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jerrydon10
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Re: More Steve Keen
Matt Holber wrote:

Both the government and big corporations have proven that they are incapable.  We need to have new institutions that are what I call for-flow institutions and we need to switch immediately away from income tax to carbon taxes.

Why do you want to tax what plants need to breathe? Why not also tax oxygen that people need to breathe? Maybe even a bathroom tax?? Smile

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