Friday, February 20, 2009
Ay Caramba! The Spanish Should Cut Taxes for the Right Reasons
Details here. An excerpt:
En conclusión, los críticos del plan de “estímulo” de casi un billón de dólares tienen razón en apoyar recortes de impuestos antes que aumentar el gasto público. Sin embargo, muchos de éstos justifican su crítica de tal forma que ellos mismos demuestran la superioridad del gasto gubernamental. Un correcto análisis muestra que es mejor permitir a los contribuyentes que mantengan su dinero, incluso si dedican el 100% para amortizar sus deudas. No hay nada mágico en el consumo para pensar que nos saque de ésta. De hecho, fue el exceso de consumo lo que nos metió en la crisis actual.
Comments:
Congratulations Bob!
Libertad Digital is the finest classical liberal newspaper in spanish, or any other language for that matter, and has exposed many people to the ideas of liberty and free markets. They are to journalism what the Mises Institute is to economics.
Now a question regarding the crisis, or meltdown as Tom Woods calls it:
On Sep 30, 2008 Frank Shostak said
"Will this printing create [price] inflation? This is dependent very much on what money will do next. If banks will not lend and banks sit on that cash forever and ever like the great depression because the risk is too high and the banks do not know if the lending will end up in good assets or bad assets, and because banks are in so many bad assets now they probably will not lend at all.
That is the observation that Murray Rothbard made, that during the Great Depression that banks have chosen not to lend because the risk of accumulating bad assets was far to high. So they were sitting on massive reserves. That is what is developing right now.
A good example is what happened in Japan in 2001-2002 where the Bank of Japan pumped 300% at one stage and lending continued to collapse. I expect similar things to happen here. If lending will not increase we can conclude this will not be inflationary."
http://mises.org/multimedia/mp3/interviews/Shostak_09-30-2008.mp3
If the FED prints money at will, but banks don't lend and people don't borrow, where would that lead us to?
Post a Comment
Libertad Digital is the finest classical liberal newspaper in spanish, or any other language for that matter, and has exposed many people to the ideas of liberty and free markets. They are to journalism what the Mises Institute is to economics.
Now a question regarding the crisis, or meltdown as Tom Woods calls it:
On Sep 30, 2008 Frank Shostak said
"Will this printing create [price] inflation? This is dependent very much on what money will do next. If banks will not lend and banks sit on that cash forever and ever like the great depression because the risk is too high and the banks do not know if the lending will end up in good assets or bad assets, and because banks are in so many bad assets now they probably will not lend at all.
That is the observation that Murray Rothbard made, that during the Great Depression that banks have chosen not to lend because the risk of accumulating bad assets was far to high. So they were sitting on massive reserves. That is what is developing right now.
A good example is what happened in Japan in 2001-2002 where the Bank of Japan pumped 300% at one stage and lending continued to collapse. I expect similar things to happen here. If lending will not increase we can conclude this will not be inflationary."
http://mises.org/multimedia/mp3/interviews/Shostak_09-30-2008.mp3
If the FED prints money at will, but banks don't lend and people don't borrow, where would that lead us to?
Subscribe to Post Comments [Atom]
<< Home
Subscribe to Posts [Atom]