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The Economy

blog.samaltman.com

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Re: The Economy

#41

Post by chillingeffect »

sama wrote: post #22
klunger wrote: post #7

He just suggested a basic income for everybody. I just wanted to point this out in case people missed it when skimming.

oops, i accidentally published an earlier draft. i added a bit more of my thinking here--my sense is that it would probably lead to less waste than current systems. i'm also not sure it's the right approach, but i haven't heard any better ideas yet.

> any better ideas yet

Progressive tax on incomes >$1,000,000. This won't slow anyone down except the ultra-wealthy.

As of 2009, it's 236,883 people. That's less than 1 in a thousand. With more income in a single year than most people in the U.S. earn in a lifetime, they'll certainly still be much more than quite comfortable.

Re: The Economy

#42

Post by sp332 »

zentiggr wrote: post #29
sp332 wrote: post #16

Earlier quoted context omitted.

You can't remove the profit motive from health care.

Please expand on that - I personally think for-profit health care is one of the most ill-conceived ways of doing business I have ever heard of. Saving people's lives but only in ways that are investor-friendly?

You can reduce it, and you can try to amplify other motivations. But if you're developing a new drug, why wouldn't you market it to people who can pay you more for it?

You can't save every life - no one is immortal. And in the decision of what care to give to which people, money will always be one factor. This is probably amplified in non-life-threatening situations since personal trainers and nutritional consultants will probably not be covered by collective health plans.

Re: The Economy

#43

Post by gautambay »

sama wrote: post #22
klunger wrote: post #7

He just suggested a basic income for everybody. I just wanted to point this out in case people missed it when skimming.

oops, i accidentally published an earlier draft. i added a bit more of my thinking here--my sense is that it would probably lead to less waste than current systems. i'm also not sure it's the right approach, but i haven't heard any better ideas yet.

i prefer universal essential services (healthcare, education, etc.) over a guaranteed basic income.

with basic income, you run the risk that the receivers spend it on shiny objects (especially in an economy like ours with rampant consumerism) instead of things that benefit them and their families long-term.

of course, what constitutes "essential services" can be the subject of a lengthy debate.

Re: The Economy

#44

Post by kaonashi »

api wrote: post #20

I have gradually become convinced by mountains of evidence from many quarters that the Keynesians are right-- we are in a demand constrained economy. One of the problems I think is that economists and politicos tend to always be fighting the last war. In the late 1970s to early 1980s -- the last time the economy seemed this systemically bleak -- the problem was insufficient capital available for investment combined w…

A large component of 70's stagflation was just supply shocks for oil. Why this never gets brought up, or is just brushed aside casually is beyond me.

> do modern industrial economies actually tend to oscillate between demand constrained and supply constrained failure modes

This is probably a pretty good way to look at it. The solution is something like http://en.wikipedia.org/wiki/Functional_finance

The meat:

1. The government shall maintain a reasonable level of demand at all times. If there is too little spending and, thus, excessive unemployment, the government shall reduce taxes or increase its own spending. If there is too much spending, the government shall prevent inflation by reducing its own expenditures or by increasing taxes.

2. By borrowing money when it wishes to raise the rate of interest and by lending money or repaying debt when it wishes to lower the rate of interest, the government shall maintain that rate of interest that induces the optimum amount of investment.

3. If either of the first two rules conflicts with principles of 'sound finance' or of balancing the budget, or of limiting the national debt, so much the worse for these principles. The government press shall print any money that may be needed to carry out rules 1 and 2

Re: The Economy

#45

Post by saym »

gregoryw wrote: post #25

Corporate savings are high across a broad basket of companies like the S&P500 because the earnings of multinationals are parked in Luxembourg, avoiding US taxes. We've all read about the Double Dutch and other IP licensing schemes that avoid taxes for Google, Apple and others. I personally feel these funds are waiting for a US corporate income tax holiday, perhaps under the guise of creating new jobs and investment d…

So, the 0% interest is a catalyst for startup investment? Do institutional investors or big banks directly fund incubators and the like?

I read somewhere recently that global bank income was up 29 billion from last year, does any of that profit come from startup success?

Re: The Economy

#46

Post by yahelc »

tdees40 wrote: post #24

I'm not clear on how any of this will lead to a recession. Why will high Debt-to-GDP or government spending send the economy into a recession? Q1 GDP numbers were clearly affected by dismal weather (although still bad), but labor markets are improving markedly, and there are reasons for optimism. I don't see this as a very convincing bear case. For the bull case, see this post, from a guy who's been right about every…

Agreed.

Further, there's little evidence that Debt-to-GDP over 100% (despite "feeling" meaningful, because, 100%!) has any kind of predictive value for the long term direction of an economy, particularly one that has unusually low interest rates. If Debt-to-GDP were a problem for the US, you'd expect higher interest rates, not lower ones, as investors would be demanding higher returns on US debt.

The fact that interest rates on Treasury bonds remain so low, despite our debt levels and despite certain political figures repeatedly attempting to force the US Government to default on that debt, is prima facie refutation of the idea that no one in the market actually thinks US debt levels pose a major macroeconomic problem in the short to medium term.

Re: The Economy

#47

Post by michaelochurch »

fokinsean wrote: post #13

Does anyone think we are heading towards an economic collapse?

True economic collapse, in which ammo becomes more valuable than money? No. Depression? Quite possible. I'd give it a 50% chance in the next 20 years (read my post on this thread, I explain some of why.)

The very long term outlook is positive; the short-term outlook is dismal. The global elite and the middle class have been at war and the latter is losing.

Re: The Economy

#48

Post by richcollins »

tdees40 wrote: post #24

I'm not clear on how any of this will lead to a recession. Why will high Debt-to-GDP or government spending send the economy into a recession? Q1 GDP numbers were clearly affected by dismal weather (although still bad), but labor markets are improving markedly, and there are reasons for optimism. I don't see this as a very convincing bear case. For the bull case, see this post, from a guy who's been right about every…

Why will high Debt-to-GDP or government spending send the economy into a recession?

Do you agree that it is a problem at some point? If so then why not at current levels?

Re: The Economy

#49

Post by lexcorvus »

In this context, I hope at some point sama has a chance (if he hasn't already) to read the post "Sam Altman is not a blithering idiot" by Mencius Moldbug:

http://unqualified-reservations.blogspot.com/2013/03/sam-alt...

The basic problem with our society is a disconnect between consensus reality and actual reality. We actually have no shortage of natural leaders. But they cannot actually lead us anywhere. They are operating in consensus reality rather than actual reality. Their joysticks are not plugged in. When the consensus is nonsense, sober good sense is nonsense. Nonsense is no use to anyone.

It's a long post, but if you're interested in examining the problems we face from a fresh and unusual perspective it's worth reading the whole thing.

Re: The Economy

#50

Post by 001sky »

tdees40 wrote: post #24

I'm not clear on how any of this will lead to a recession. Why will high Debt-to-GDP or government spending send the economy into a recession? Q1 GDP numbers were clearly affected by dismal weather (although still bad), but labor markets are improving markedly, and there are reasons for optimism. I don't see this as a very convincing bear case. For the bull case, see this post, from a guy who's been right about every…

"Why will high Debt-to-GDP or government spending send the economy into a recession?"

You're confusing the short run and the long run. In the long run there are more degrees of freedom. In that context, this quote simply seems to show a lack of imagination. Entities that extremely indebted lack strategic operating flexibility (countries and businesses alike).

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