Monday, April 11, 2011

one task taxes/subsidies thru the two way street of the transfer system does better then households

 extract any funds  necessary to reach optimal  social accumulation goals
or inject any funds necessay to reach socially optimal consumption levels

we don't need no damn  home front  prudence here
between the system state based transfer system and the system state based credit system

we can automate the systemic adjustment to many  agent actions and  transactions
 that have external effects
think of the interest rate as a pigou tax or subsidy a registration of the externality effect
  of any  units choice of expenditure  on    consumption or investment  goods
in particular durable goods

obviously a tax/subsidy  on expenditures is a full symetrical system that a borrowing rate isn't
unless the borrowing rate can be both charge in one system state and  discount in another