Re: investment and unemployment

[GGard97342@xxxxxx]

In a message dated 07/04/2000 00:29:56 GMT Daylight Time, mosler@xxxxxxxx
writes:

> And inflation raises the 'moral hazard' issue of geometrically expanding
>  borrowing.
>
I do not see that. Inflation is the least painful way of reducing the debt
overhang. Deflation makes it more serious and the geometrical progession is
upped a power or two.

I seem to remember calculating that the real interest rate paid by British
business in 1929 was around 29%.

However I do not want to give the impression I condone asset price inflation
and would do nothing about it. This is in fact the prime target of "The Gang
of Eight". We would use several means to reduce it, including varying capital
adequacy ratios.

Geoffrey Gardiner