> Is this a sign? If so of what?
Remember Keynes. If savings=investment, then the US economy is eating
its own future.
Néstor Miguel Gorojovsky
[EMAIL PROTECTED]
============
The equivalence elides the "direction" of causality. If investment drives
growth and profitability [a la Minsky's profits=investment] and is capable
of generating wage income and profits at a level capable of inducing a
sufficient propensity to save then the virtuous circle kicks in. So, while
the US consumers are currently eating their own future, they are at least
doing it in the hope [probably futile, but who knows] that they can grow
their way out of debt. Maybe that's why AG is letting the unemployment rate
dip to its current level, he looks into the Marianas Trench of debt, gets
vertigo and says "keep 'em working or we're fucked."
The big ? over the next 20 years is whether wages and profit levels will be
enough to sustain both the outlays for the retiring boomers while workers
and firms generate enough innovations worth investing in or whether the debt
level takes on a black hole-like structure that no amount of innovations of
financial instruments can overcome if there aren't a suitable number of
technological, process [or other] innovations worth investing in.
"For there is no sense in building up a new enterprise at a cost greater
than that at which an existing asset can be purchased; whilst there is an
inducement to spend on a new project what may seem an extravagant sum, if it
can be floated off on the stock exchange at an immediate profit." [K, GT in
DH page 144]
Given the hefty costs for new technologies [esp. the green ones we
desperately need] Can the "speed" of innovation accelerate or are we heading
"though the looking glass" where we have to run harder and harder just to
stay in the same place, let alone grow?
TGIF,
Ian
