[philosophy of economics]Absolute reserve and relavtive reserve

Hi,

I can appreciate the attempt to figure out what is appropriate for people to reserve. While reserves, savings, was a big problem in the U.S., it went for beyond that. Debt became stratospheric? Why?

From a philosophical point of view, I think we have to look at why people are so willing to go into debt far beyond their means. Is there such a thing as appropriate debt? Certain people want SO much more than they can ever hope to use and will do anything they can to get it - debt and more. It seems like there are no boundaries for them.

Also, one has to take into account that certain people, want to have more than their neighbors, and again will do what they have to do (laws are not necessarily limiting) to achieve it and there are people willing to provide debt as we have seen over the last 10 years.

The game of King of the Hill begins as a child and carries on into adulthood, as the stakes get bigger. I think any theory of reserves embrace this aspect of human behavior, which apparently exists everywhere for all time.

So for me, debt is as big an issue as reserves.

Rich

Actually the problem of reserve should be important than debts. If we have more reserve, no matter how much debts we have got, as soon as A>0 and 1.5<=P<3, there is still no financial crisis at all. Debts have alreday been included in consumption. If you have got a high income, this is reasonable for you to have a high consumption at the same time (that's what Hong Kongers always do... rich spend more and poor spend less, what we concern is only about the percentage but not the amount. We are good at accounting...:sarcastic:)

So, solving the problem of reserve, there is no problem of debts. Of course, controlling the reserve, we have to control our consumption to fit the target of 1.5<=P<3, in which debts may affect. But it's just one of the factors.

Mathematically it may be true, but it seems that people behave in an opposite manner. Periodically taking on much, much more debt than they could ever pay back - and everyone seems to encourage it. It is a rather interesting phenomenon, and whenever there are regulations, there are ways to circumvent them in order to make money and buy things. Like a drunken party.

Rich

That's the problem of macroeconomics. The stupid belief of consumerism encourage people to consumpt more so as to boost the growth of economy. However, such a silly belief doesn't work among Chinese societies. Contrarily, generally speaking Chinese, Taiwanese and Hong Konger tends to be an "oriented Mr./Miss. Scrooge" (Of course teens, especially some teen girls are exception...). One of the reason that the mainland China remaing the greatest amount of foreign exchange reserve is that the officials value reserve very much (even more than people's lives sometimes... that's why corruption is serious in mainland China=,="). But we have to balance. Too much reserve is not a good financial arrangement.

As long as we can keep our reserve to be a reasonable percentage, we can avoid the problems of debts. Of course for those American who has no concepts about reserve, such a theory become difficult to apply although the mathematical method is very simple......

I think it may be more inherent than that.

Part of philosophy is to observe. I have observed that this propensity to desire more than one has, seems to have existed as long as recorded history. So, I do not expect to change it rather than to observe and try to understand it.

It seems like the urge to survive (which seems to be inherent) can manifest itself in many ways. Of of which is to accumulate more than one can use. It has gradations, but seems to exist everywhere. It seems like people what to extend their personal physical boundaries outwards in order to feel more secure in their life. But I don't think laws or logic will change this. All that happens is laws are broken (people are prepared to take the risk) or circumvented (as we have seen many times over in recent history), or laws changed to favor those who want to accumulate, by using money to change the laws themselves.

Anyway, it is difficult for me to turn my eyes away from these observations.

Rich