Who Were the Sea Peoples?

Nick Rowe attempts to explain OLG models again: "...if you use debt to finance transfers to the old in generation A [, t]here is no way you can do it without making some future generation have lower lifetime utility." I spent some time with an OLG model, and after a while I understood the model. At the very least, I could clearly see how wealth was being transferred from the young to the old. And from the moment I grasped the model, it seemed to me the key was the transfer payments, not the debt. So yes, if you transfer wealth from the young to the old, you transfer wealth from the young to the old! And that happens whether you transfer it using debt or taxes.

Nick Rowe is simply one of my favorite, favorite economists alive today. When he generates a macro-economic model, I spend as long as it takes to grok it, and the time is always well repaid. And sometimes it takes me hours to get what Nick is saying in a model that probably took him minutes to knock off. In other words, in general, I am in awe of Nick's depth of understanding of the macro-economy. But... On OLG models and government debt, he is simply stuck on one model , and can't see that we can easily model the exact opposite result! Yes, debt can have inter-generational distributional implications: but it can have them in either direction, or it can be completely neutral in this regard! I can be walking down the street, whistling, and 1) Shooting random people nearby. Or I can be walking down the street, whistling, and 2) Handing out sandwiches to needy people. The fact that I can create a model in which 1) occurs no more proves that whistling causes mass sho...