Comments on: Chart of the Day: Personal Income and Outlays http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: Marshall Auerback http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58345 Marshall Auerback Wed, 03 Feb 2010 16:58:00 +0000 http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58345 In a message dated 2/3/2010 09:56:37 Mountain Standard Time, writes: So we should not be asking whether the government's money is as good as the private sector's but rather whether the government's spending is as good. That's where the real debate lies. I believe I am more sceptical here. Perhaps, but if the private sector is not spending (as it the case today), then who is left to do the spending? In a message dated 2/3/2010 09:56:37 Mountain Standard Time,
writes:

So we should not be asking whether the government’s money is as good as
the private sector’s but rather whether the government’s spending is as
good. That’s where the real debate lies. I believe I am more sceptical here.

Perhaps, but if the private sector is not spending (as it the case today),
then who is left to do the spending?

]]> By: Edward Harrison http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58342 Edward Harrison Wed, 03 Feb 2010 16:29:00 +0000 http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58342 Daniel, I will have to look to see what a graph of transfer payments looks like. That way we can look separate wages out of personal income. I had someone who saw this post at Seeking Alpha ask the same question. When it comes to government spending, Marshall is right about there being no free lunch. Money from the government's programs pays just like any other money. And there is no embedded inflation in a system with 17% underemployment and 70% cap. utilisation. So we should not be asking whether the government's money is as good as the private sector's but rather whether the government's spending is as good. That's where the real debate lies. I believe I am more sceptical here. Of course, in the absence of increased government spending, you get depression. That's always something you should keep in the back of your mind. Daniel, I will have to look to see what a graph of transfer payments looks like. That way we can look separate wages out of personal income. I had someone who saw this post at Seeking Alpha ask the same question.

When it comes to government spending, Marshall is right about there being no free lunch. Money from the government’s programs pays just like any other money. And there is no embedded inflation in a system with 17% underemployment and 70% cap. utilisation.

So we should not be asking whether the government’s money is as good as the private sector’s but rather whether the government’s spending is as good. That’s where the real debate lies. I believe I am more sceptical here.

Of course, in the absence of increased government spending, you get depression. That’s always something you should keep in the back of your mind.

]]> By: Marshall Auerback http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58336 Marshall Auerback Wed, 03 Feb 2010 13:46:00 +0000 http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58336 In a message dated 2/3/2010 02:38:08 Mountain Standard Time, writes: How much of the personal income is from transfer payments and how much is truly earned? Does this question matter if the conclusion is that government can hand out free money w/o any limit (and generally w/o any consequences) as Marshall has argued? More "free lunch" rhetoric! The spending is not "handing it out", but is seeking to offset lost output. When that money is spent, it creates new real assets. I've never argued that there are no consequences (again, a total mischaracterisation of my position from people who don't read it carefully). If there is too much government spending, it can get inflationary. We want government spending to be neither too hot, nor too cold. But with 17.5% under and unemployment and 70% capacity utilisation, it's hard to make the argument that government spending is going to create inflation. That's more likely to happen as we approach fuller employment and higher capacity utilisation, which is exactly the objective here. In a message dated 2/3/2010 02:38:08 Mountain Standard Time,
writes:

How much of the personal income is from transfer payments and how much is
truly earned? Does this question matter if the conclusion is that
government can hand out free money w/o any limit (and generally w/o any
consequences) as Marshall has argued?

More “free lunch” rhetoric! The spending is not “handing it out”, but is
seeking to offset lost output. When that money is spent, it creates new
real assets. I’ve never argued that there are no consequences (again, a
total mischaracterisation of my position from people who don’t read it
carefully). If there is too much government spending, it can get inflationary. We
want government spending to be neither too hot, nor too cold. But with
17.5% under and unemployment and 70% capacity utilisation, it’s hard to make
the argument that government spending is going to create inflation. That’s
more likely to happen as we approach fuller employment and higher capacity
utilisation, which is exactly the objective here.

]]> By: daniel http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58326 daniel Tue, 02 Feb 2010 20:51:00 +0000 http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58326 "How much of the personal income is from transfer payments and how much is truly earned?" I'm not 100% sure since I'm from europe and don't know the details of your system, but the second chart might answer your question. http://econompicdata.blogspot.com/2010/02/were-all-socialist-now.html “How much of the personal income is from transfer payments and how much is truly earned?”

I’m not 100% sure since I’m from europe and don’t know the details of your system, but the second chart might answer your question.

http://econompicdata.blogspot.com/2010/02/were-all-socialist-now.html

]]> By: haris07 http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58324 haris07 Tue, 02 Feb 2010 19:29:00 +0000 http://www.creditwritedowns.com/2010/02/chart-of-the-day-personal-income-and-outlays.html#comment-58324 How much of the personal income is from transfer payments and how much is truly earned? Does this question matter if the conclusion is that government can hand out free money w/o any limit (and generally w/o any consequences) as Marshall has argued? Separately, how much of PCE is imputed economic rent on past purchases and how much is real purchases of goods and services? How much of the personal income is from transfer payments and how much is truly earned? Does this question matter if the conclusion is that government can hand out free money w/o any limit (and generally w/o any consequences) as Marshall has argued?

Separately, how much of PCE is imputed economic rent on past purchases and how much is real purchases of goods and services?

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