Economist argues years of loose money and state investment have weakened consumption and deepened overcapacity, and calls for a more neutral monetary policy and livelihood-centred fiscal spending.
Someone needs to direct the professor to the crowding-in effects from government investments. We see this in China's deflation and enormous trade surpluses. The crowding-out effects of government spending is the result of entropic spending. Not all government spending are the same.
Has the professor considered deflation has distorted consumption? Consumers are spending more but at lower prices? GDP is not a good measurement of the economy because it is too dependent on prices.
If the professor is concerned about public debt, is it really an issue? The borrowing cost is the lowest in the world. Local government revenues come from sales tax which can be resolved with a little bit of inflation or transfer the debt to the central government since it collects taxes. In the US, taxes are sent back to the local government instead of the central government assuming the debt. It's basically the same thing.
The debt debate is more about oranges and apple when comparing with the US. The US debt only includes the federal debt while China's debt includes both local and central government debts. If the US local debt and federal debt were added up together, it would be greater than China's debt.
This is a nonsensical argument. It assumes that consumption capacity falls from the sky. On the contrary, it only comes from earned income, which in turn only comes from investment (liquidity) in production. Consumption spend ontologically & logically follows investment demand. It’s not about “compensating” - wrong either / or frame. It is a circuit that originates from autonomous demand - investment and / or exports. Nothing mysterious. The rest follows. It is possible that net liquidity growth is ineffective in that its flows through the system are into non-productive channels, or channels that have limited impact on second round activities eg., too much into fictitious capital circuits.
“A system endures not by how much it produces, but by how well it remains within what allows it to continue.”
https://conversation.substack.com/p/stability-under-constraint?r=6fuqhc&utm_medium=ios
Someone needs to direct the professor to the crowding-in effects from government investments. We see this in China's deflation and enormous trade surpluses. The crowding-out effects of government spending is the result of entropic spending. Not all government spending are the same.
Has the professor considered deflation has distorted consumption? Consumers are spending more but at lower prices? GDP is not a good measurement of the economy because it is too dependent on prices.
If the professor is concerned about public debt, is it really an issue? The borrowing cost is the lowest in the world. Local government revenues come from sales tax which can be resolved with a little bit of inflation or transfer the debt to the central government since it collects taxes. In the US, taxes are sent back to the local government instead of the central government assuming the debt. It's basically the same thing.
The debt debate is more about oranges and apple when comparing with the US. The US debt only includes the federal debt while China's debt includes both local and central government debts. If the US local debt and federal debt were added up together, it would be greater than China's debt.
Is this guy Milton Friedman reincarnated?
This is a nonsensical argument. It assumes that consumption capacity falls from the sky. On the contrary, it only comes from earned income, which in turn only comes from investment (liquidity) in production. Consumption spend ontologically & logically follows investment demand. It’s not about “compensating” - wrong either / or frame. It is a circuit that originates from autonomous demand - investment and / or exports. Nothing mysterious. The rest follows. It is possible that net liquidity growth is ineffective in that its flows through the system are into non-productive channels, or channels that have limited impact on second round activities eg., too much into fictitious capital circuits.