Bob summarizes the whole discussion in dialog form here. Impressive. I have to admit I only skimmed the first gazillion lines until my lines came up. I was quite happy with Bob's presentation of what I've been saying. Plus I drove David Brooks insane, which is always nice.
Bob introduces new OLG schemes that are also worth looking at carefully. Now instead of one person at the end holding the hot potato when the government redeems the debt, he has everyone after a certain point earning less than 200 over their lifetime by continuing rolling over a portion of the debt at a 100% interest rate (yes you read that right) and taxing to pay for the other portion. So essentially he takes that old tax on Iris and doles it out over time rather than in one go at the end.
UPDATE: What I learned from Bob's dialog is that instead of being fooled by these politicians with empty promises, we should pay for transfers to the elderly with a dedicated tax that puts money in a fund entirely separate from the general fund, and we should hire a bunch of actuaries to keep the program as steady as possible. If only a kickass president in the 1930s thought of that one... oh wait! And it's a good thing too - we needed that wiggle room in the debt five years later to make a real investment in civilization: namely, driving fascists out of Europe, Africa, and Asia (and now we have a new interminable debate topic: democratic pacificism in the face of imperial fascism - can anyone with a pulse support it? I will be arguing the negative, Bob (I presume - as a pacifist himself) will be arguing thte affirmative).
Yes Scott Sumner Is “the NGDP Guy”
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