Quite so!

The paper explains the approach to maturity. Links are in the article.

I do not admit what you suggest. Ending excess credit expansion is not the same as promoting deflation. One of the key problems of our banking regime is that the combination of central banking with fractional reserves on demand deposits creates, as Buchanan put it, "monetary anarchy". The combination puts the money supply at the mercy of the rate of lending, which is determined by individuals' subjective choices: this ought to explain why the contemporary mainstream so often cannot agree whether inflation or deflation is the risk. And please note that Buchanan is a public choice theorist, not an Austrian. It is true that many of the people at the Cobden Centre follow the Austrian tradition, including me, but if you look at our literature, you will find that our thinking spans several schools. I will not be able to give detailed answers here today, unfortunately, but I will review the comments and attempt to target future articles to the concerns raised. I certainly don't expect to win all the arguments with a single CentreRight post! You may enjoy Jesus Huerta de Soto's coming Baxendale-Hayek lecture at the LSE: Date: Thursday 28 October 2010 Time: 6.30-8pm Venue: Sheikh Zayed Theatre, New Academic Building, LSE Entry is first-come, first-served.

David Cameron made a call for MPs' pension reform and I look forward to supporting him.

Calling people names will not solve the problem of paying people's pensions and paying them with money of any value. It is your lazy, immoral, dogmatic, statist ideology of "promise now, someone else pays later" which has led to this diabolical mess which threatens not only the most vulnerable but everyone in society, especially those who planned to retire on the state's promises. Are your views acceptable? You may think so. I couldn't possibly comment.

1 - Indeed we are not the USA, but the BIS report shows that the problem is international, Kotlikoff's article prompted Dowd's and that video is instructive in any event. I would be delighted to find a similar visualisation for the UK. 2 - At the IEA/TPA conference on the emergency budget, David B Smith expressed skepticism about the meaning of GDP at such high levels of state spending. See also Corrigan's article "Grossly Distorted Product", in which he explains some of the problems with GDP: http://www.cobdencentre.org/2010/08/grossly-distorted-product/ 3 - Perhaps and I have a keen interest in health but see the BIS working paper for the imperative for pensions reform. We need to act.

There are two kinds of insolvency: balance sheet and cash flow. IIRC, bankruptcy is a status of insolvency determined by a court, so I suppose we could have a conversation about semantics. I understand Prof Dowd to be concerned about our medium- and long-term cash flow solvency. Please see his article. However, a nation with its own currency can resort to debasement rather than default - I understand we went to the IMF because we were short of US dollars, not Sterling - hence the risk of extreme debasement raised by Prof Dowd and the BIS. The BIS writes: "Finally, looming long-term fiscal imbalances pose significant risk to the prospects for future monetary stability. We describe two channels through which unstable debt dynamics could lead to higher inflation: direct debt monetisation, and the temptation to reduce the real value of government debt through higher inflation. Given the current institutional setting of monetary policy, both risks are clearly limited, at least for now." There is surely a conversation to be had about the UK's balance sheet solvency, particularly in the context of meeting future cash-flow liabilities. IE, I would have thought we could agree that it would be a terrible idea to sell the roads to someone long Sterling in order to meet pension obligations, for example.

You are certainly correct. The present unhealthy system of corporatism must end, particularly in the financial sector.