Thursday, 13 November 2008

CiF Comment Of The Day

From here:

"I can't believe how many people think printing money is a good idea. Has the world gone mad, or is the greed of the boomer generation so entrenched that they will countenance anything, even the destruction of the economy, in the vain hope that they can continue to live beyond their means." - Council House Tory


Mark Wadsworth said...


Dave Semple said...

Not quite sure if you're posting to celebrate such a comment or posting it to ridicule it.

Living beyond ones means. The whole concept is ridiculously loaded.

To say that one shouldn't "live beyond their means" isn't to promote fiscal responsibility, it's to entrench almost with moralising overtones the idea that we should all be content to get exploited at whatever rate we're being exploited at, because if we don't like it, we can climb a pre-ordained greasy pole.

Macx Stirner said...

Have to agree with you, Dave. "Those who live within their means suffer from a serious lack of imagination", to paraphrase a great man. I don't mind everyone else living within his means, of course. More for me!

This is what many "libertarians" fail to realise. Living within one's means is profoundly unattractive! If I got my fair share of the world's natural resources, that might be worth a grand or so. I'd have to work for every red cent beyond that, knowing that I could never really keep up with the inherited wealth of the rich, barring some stroke of entrepreneurial genius - possible, but less likely in a free-market world where so many of the asymmetries that allow real enterprise would have, I believe been smoothed away. An example - Forex trading accounts that offer 200:1 liquidity; I hardly think these would exist in a world without Central Banking and government-protected 100:1 reserve banks. Maybe one-quarter of my income is sapped in taxes (I'll pay half to the government, which should kick about half of that sum back to me, wasting the rest), and regulation would decrease, so I'd be a little more productive, and a little richer. But how much more seductive just to reach out and take what appears to be going!

John B said...

More prosaically, we're at a serious risk of deflation; at that point, printing money is not only harmless but actively A Good Thing, even to the (obvious) extent that it raises the price of imports.

QT said...

Does deflation have to be avoided at all costs?

Patrick Vessey (LPUK) has an interesting perspective.

Wolfie said...

You have been conned by BBC/New Labour propaganda. After years of inflation and devaluation we need a period of entrenchment to prevent a slide into monetary ruin. Take a look at this graph :

Deflation would be good for our economic future but somehow a ruinous policy is more attractive to our government.

QT said...

Hang on, wolfie. Who are you responding to in your comment?

John Demetriou said...

People are getting all sanctimonious about the 'living within ones means' debate, without turning the concept on its head, and asking whether it's a recommended course of action to consistently spend more than you have.

I think there is a degree of flexibility in the concept of living within ones means.

For example, a small businessman just starting out will have to borrow in order to grow his business in order to make lots of cash to pay back the debt and do well for himself.

Another example would be someone who finds himself temporarily short one month and uses a credit card for a few hundred quid and then pays it back a month later once he's sorted himself out.

We've all been down that road.

I think the real context for this debate lies in the fact that lots of people got drunk on the cheap credit era (the era of the false Brown boom) where many fooled themselves into thinking they could live like fucking WAGS, footballers and celebs by buying up plasma TVs, Jimmy Choo shoes, handbags, cars and you name it whilst on £18,000 a year.

Who do you think bought into those 120% Nothern Wreck mortages? Believe me, I've met plenty of such people, and it is right and just that they learn the hard way.

This way, they won't be so bloody stupid again, and indeed, banks won't be so quick to lend to half-wits. This is a learning curve for all.

So when we talk about living within our means, I believe it is entirely congruent for Libertarians to take forward this concept and to recognise that, as with the free market and human nature, things tend to correct themselves and work themselves out even if it looks harsh to those of a bleeding heart disposition.

I would add at this point that I have always chosen to live within my means. Which is why I rent, and haven't bought a house, and why I drive an old banger and refuse to do H.P.

Because of socialist intervention and free market meddling, I am not benefitting from such prudence to the extent I deserve. The State interfers and meddles with the system to such an extend, and taxes and redistributes in such a way, that it's the idiots and morons that benefit.

Look at Brown's pledge to intervene in repossessions and prop up those who fail.

He is actually, contrary to received wisdom, acting extremely immorally and stupidly. It's not much different to what happened in the U.S.S.R or the former GDR. Except in Britain we have a complex system where the government allows people to take home a percentage of their salaries, so that they can pay most of that in indirect taxes at a later date.

You could argue the Communists of Eastern Europe had a more efficient system than our own.