quote:
His idea of the government helping out those who can't get a loan on their own etc is sound in theory, but if 1/3 of those government loans is paid back and that individual becomes successful, then there will be more total at the end of the day long term. Both will be able to buy a coat as he likes to say.

Good point. I'd like to see government data track "crop yield" on expenditures like this. It should be trackable data through income tax filings.

Actuarial tools can assess the probability of future income earning potential at the time of loan application. Five and ten year year outcomes can assess whether there was a positive gain or no difference, and whether that positive gain offset the losses.

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Posted by RedStickBR

Member since Sep 2009

14577 posts

Posted on 6/13/17 at 7:34 am to Willie Stroker

Hope everyone is enjoying the book so far. I was on the road yesterday and am on the road today so will begin "moderating" more tomorrow, but glad we already have some early discussion going. Note also that those who need a little more to hold them over until next week should check out this week's Econ Talk podcast covering the topics of Command Economy / Central Planning vs. Free Market Economy / Invisible Hand and also the phenomenon around spontaneous/emergent order in the world. Also, to give us all a sense of "where we are on the map" with Hazlitt, I found this "economics family tree" helpful:

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Posted by Buckeye06

Member since Dec 2007

23169 posts

Posted on 6/13/17 at 7:37 am to Willie Stroker

quote:
Actuarial tools can assess the probability of future income earning potential at the time of loan application. Five and ten year year outcomes can assess whether there was a positive gain or no difference, and whether that positive gain offset the losses.

Agree. I know he is trying to keep it extremely simple but his assumptions sometimes make the scenarios too simple

There was one situation (not sure which chapter I'm about 1/4 in) where he said something like "assume for a minute there is someone who can take that exact job." He makes the huge assumption that there is skilled labor ready to take an open job and perform it at a competent level. Of course that makes things look rosy, but it's just not realistic.

As I said I know he is trying to keep it simple, but sometimes being too simple makes things look different than they are

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