Re: Does debt matter

[Harry Veeder <aa361@xxxxxxxxxxxxxxx>]

Harry:
>> ...  A "high" national debt/GDP ratio pushes national
>> (aggregate) demand ahead of national (aggregate) supply. Inflation is
>> a natural consequence of demand exceeding supply. Inflation says,
>> "restrain your demands!".

Hyman:
>Is it not obvious that in view of our high rate of unemployment that
>the reverse is true, that Supply has far exceeded Demand, for at least
>the last century?

I don't think it is obvious because I don't think it is accurate to say
there is a high rate of UNemployment. I think it is more socially
accurate to say there is a high level of UNDER employment with an associated
problem of OVER employment.

This of course requires new theories of under and over employment to
supplement the traditional theories of voluntary and involunatry
unemployment.

Any takers? (I think Per G. is working on a theory of under employment.)

>If we indeed had a short Supply, and an unfulfilled
>Demand, would that not reduce Unemployment, the reverse of current
>conditions?

No, I don't think it would necessarily resolve the employment problem. In
fact I don't think governments can solve it. People should reorganize
the nature of paid work on their own.   The most important assistance
governments can provide is to protect and stregthen the education, health
and welfare systems.

> Is not "inflation" a now deliberately controlled condition
>of Price Fixing and arbitrary adjustment by the Federal Reserve?

No, I don't think so.

Harry Veeder