Warren's Seminar (and ric's plea)

[bill mitchell <ECWFM@xxxxxxxxxxxxxxxxxxx>]

Ric's Statement first

pkt has deteriorated a lot in the last couple of months. there seems
to have been an inflow of several newcomers who have  not said much
at all about pkt (whatever your slant on that is). and the way
alan has been dealt with bothered me, although i think he is tough
enough ...water off a duck's back. even though we had pretty
tough debate in the earlier days, and some culturally-eccentric
language that upset at times, there was always debate on the economics.
somehow we talk about economics less now and a whole bevy of other
junk (not unimportant but not economics) and we do so without much
attention to any "theoretical or conceptual" structure. that is why i liked
pkt in the "gods" (good old days) - we talked a lot about theory and
concepts.

anyway, the list is just a reflection of its members. if it has
gone downhill it is b/c the balance has swung away from the gods types towards
some new cohort who seem more obsessed with preaching religion than they are
with talking economics. a lot of recent stuff seems to start off with "i am not
an economist but" or "i don't know anything about economics but" then proceed
into an avalanche of abuse and zealotry against known economists on the list. i
am not against non-economists being on the list or talking as much as they
like, but if you recall the hayek-invasion, one of my complaints then was the
simplistic representation of economics by non-economists, all in the name of
pushing an agenda, alien to the list.

however, i am glad ric is not going to moderate. look at the marxism lists.
fuck, they are the place of very odd goings on at times. if you thought we were
into flaming here check them out.it makes us look like angels.

in general, i favour the free for all. i hate the idea of big brother or elite
groupings or anything. the delete key is pretty easy to use. whenever i see a
mail form HB i know it will have FOOD in it about 100 times, and i have read
his message and i know  it, understand it, have an opinion about it, and i
don't think he is going to talk about economics so it gets the d key. several
others too of late. i appreciate your archive cost problem. in that case, I
would cut out anything you didn't think was of value to posterity. perhaps,
ric, you might ask me which ones should go!!!!! i just re-rehearse my d key for
you. anyway, about censorship...

well censorship begins with the title, pkt, no.


AND NOW FOR THE SEMINAR

Warren said the following:

>The national accounting double entry bookkeeping system is always in
>balance. Entries on one side of the ledger must be accounted for with
>offsetting entries on the other. Investment, for example, is accounted
>for as savings in national income accounting, so, by definition, total
>investment will always equal total savings. Government deficit spending
>is classified as government dissaving, and the offsetting accounting
>entry is an increase in net private sector nominal savings. Thus,
>whenever the government engages in deficit spending, aggregate private
>sector H(nfa) is increased, with H(nfa) including offshore holdings of
>dollar denominated assets. Furthermore, the level of government deficit
>spending determines private sector H(nfa). Should the private sector
>desire to increase its H(nfa), this desire can be satisfied only by an
>increase in government deficit spending.

in terms of sectoral flows this is not entirely accurate.

Total Inv does not have to equal total savings.

if G minus T < 0 (deficit) this does not have to be an increase in private
sector nominal savings (unless you include in the private sector all entities
other than the sovereign govt. which would be stupid).

For example, a deficit could be wholly financed by the sale of securities to a
foreign government with no change in private sector H(nfa).


What is true is that a deficit will either be reflected in

(S - I) > 0 and/or (M - X) > 0
(S - I) = 0, (M - X) > 0
(S - I) < 0, (M - X) > 0

and reverse combinations.

just musing.

kind regards
bill
--

         ####    ##       William F. Mitchell
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