Re: NAURI

[Bruce McFarling <brmcf@xxxxxxxxxxxxxx>]

On Thu, 6 Apr 1995, John Gelles wrote:

>      The Non-Accelerating Unemployment Rate of Inflation
>                            (NAURI)
Oh, and to make that an exact parallel ot NIARU, it would be
Non-unemployment accelerating rate of inflation, but I prefer to stick
to Indian PM's.

>          Meets the Negative Income Tax/(Loan) Lottery
>                            (NITLOT)

And, for rhetorical reasons, an acronym beginning in NIT provides an
opening for something like:
	Negative Income Tax With Inflationary Threat (NITWIT)
or some such, so avoid NIT... for the beginning of acronyms.

OK, enough fun and games, on to Keynesian economics (in hopes that we can
eventually get to Post Keynesian economics)

...
>          At any higher rate, there will be less purchasing
>     power in the market than before. Less purchasing power
>     implies lower potential sales, profit and jobs. Hence
>     any rate of unemployment higher than one percent will
>     cause a still higher rate:  The rate will accelerate
>     until it reaches one hundred percent of the market
>     labor force -- the only work done after that will
>     be done not in the market for money but outside the
>     market for immediate reward.
	This was something along the lines of some reasoning about the
multiplier in the (late 20's/early 30's).  But if incomes go down,
consumption does not go down in proportion, so that while there is an
amplification effect, it damps out before 100% unemployment is reached.
Of course, a capitalist economy might trundle along at a level of
unemployment that seems intolerable to many (especially among those who
have been drafted to serve as common foot-paupers in the fight against
'inflation'), but fractional positive feedback implies that
unemployment increases *will* be amplified but will *not* just go barrelling
out of control.

	Of course, this is all comment on the preliminaries.  Since the US
House is just now trying to give away a big lump of tax revenues in the
forms of capital gains reductions, there's your funding for the lottery:
the tax collected because someone got lucky in terms of the an increase in
the value of the property they held goes into the pool.  But make it more
fun.  If someone reports the price they paid for property that might have
given someone a capital gain, give them two entries in the lottery.  Have
one winner drawn each month (*Big* jackpot).  And all you had to do to
enter was do what almost everyone tries very hard to do anyway: make
enough to live on and have a little extra.  Lot better use of the money
than giving it as a reward to someone for simply trying to become
wealthier and more powerful.  I love it.

Virtually,

Bruce McFarling, Knoxville
brmcf@xxxxxxxxxxxxxx