Re: Warren's Seminar (and ric's plea)

[Warren Mosler <mosler@xxxxxxxx>]

>
> 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).

Bill,

Thanks for picking this up.  My term 'private sector' was incomplete.  At
other times I have used 'non-government' but that too could be construed
as leaving out foreign governments.  I need a term that includes all but
the government that 'issues' the currency.  For this purpose, a foresgn govt
is in the 'private sector.' Any Ideas for a one or two
word phrase?  Meanwhile, the paper will be corrected.

Thanks again,

Warren

>
> 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
>        #######   ####     Head of Economics Department
>      #################    University of Newcastle
>    ####################   New South Wales, Australia
>    ###################*   E-mail: ecwfm@xxxxxxxxxxxxxxxxxxx
>    ###################    Phone: +61 49 215065
>     #####      ## ###            +61 49 215027
>                           Fax:   +61 49 216919
>                   ##      http://econ-www.newcastle.edu.au/~bill/billyhp.html

--
Warren B. Mosler
Director of Economic Analysis
III Finance

See:

"Soft Currency Economics"
=========================
And related documents:

http://www.gate.net/~mosler/softecon.htm