What are the ways and means of getting to a zero growth economy. Please, when you have genius-level economists on, begin the discussion now.

You can follow the interview down the road of the present economic model. That Solow discerns so well that we are attempting to buy beyond our means with, for exmple, uber-expensive dental devices is exactly the case. Maybe it will take 100 years, but how do we walk away from this model without sending things into freefall?

How do we get to an economy that doesn't demand ever greater amounts of "Holiday" spending?"

Dear Paul,

I watch the video on Solow with some interest because he is not quite correct.

His vintage capital growth model believes that growth is attributable mostly to technology growth. This is not a non-violable law of nature because Alan Greenspan was able to grow the economy with low-tech housing and auto industries, after he unexpectedly disrupted the "irrational exuberance" of the explosive growth of high-tech Internet industry by choking off just slightly the money supply. Solow thought that there is an oversupply of housing.

I do not believe that there is an oversupply of housing, which is the general consensus of today "common-sense" economists, who neither have predicted not are able to solve the current financial crisis. The US home ownership when up from 60% to 70% of US population. 70% is not oversupply; there is still 30% vacancy!

Post-Science Institute believes that recent financial crises are due to the ignorance of non-violable laws of nature. Milton Friedman once used PQ=VM2 as his car license plate. P is the Price, Q is the Quantity, V the Velocity of Circulation of Money, and M2 the broad Money Supply. I, too, speculate that PQ=VM could be a non-violable law of nature in economics.

Greenspan caused a stock market crash when he absentmindedly meddled with M in PQ=VM where VM must keep up with the explosive growth of PQ due to the Internet, which verifies the growth theory of Solow. Greenspan wisely use low interest rate to sustain the economy after the collapse of the building of the Internet infrastructure, which remained toy like with low speed and uncontrollable spamming and viruses.

The low interest rate caused the housing and auto boom. Solow is proven wrong because Q, not P, was enough to grow the economy without technology growth. He needs to learn the existence of non-violable laws of nature in economics.

Before another major innovation can take the place of the discouraged Internet entrepreneurs, the Fed started to increase the interest rate in 2004. According to the solution of value, which is a non-violable mathematical law of nature in economics, mortgaged real estate price decreases by about 9% for every percentage increase in interest rate. Increasing the fed rate from 1% to 5.25% triggered the Subprime Woe, which would NOT be due to subprime lending, if the mortgage payment had not been raised by the rise in interest rate. The over-valuation of the housing price is easily predictable by the solution of value.

Your readers can check the relationship between the price and the interest rate in a few minutes just by doing two calculations (change the two interest rates for Items 8 and 10 from 6.25% to 7.25%) at: http://www.123is.com/fedreal.htm

which has been released to the Fed and the public use during the crisis.

The Subprime Woe caused a chain reaction, resulting in the credit crisis, which expanded through the law of nature of Finite Spreadsheet Instability into the current financial crisis. The cure, according to the laws of nature, namely, PQ=VM and solution of value, is to wind back the clock by lowering the interest rate to solve the Subprime Woe and by reinvigorating the proven Internet industry.

The solution of value can stabilize the price with an Infinite Spreadsheet Instability. If all market participants, including the policy maker, can calculate the correct price based on value, which is defined as the sum total of all the future benefits and losses to infinity in time, the real estate price will be stabilized. Otherwise, the Finite Spreadsheet Instability, which takes a short-sighted view of the price trend, is on its way to expand the Fed caused Subprime Woe into another Great Depression, fed by the free energy supplied by all the financial derivative, whose volume is currently matching the $50 trillion Gross World Product.

Understanding post-science Non-violable Laws of Nature in social science, which is order of magnitude more complex than the science, not just common-sense economics even less rigorous than science, is needed to solve the current and all future financial crises. While Friedman is no longer with us, we still have Ben Bernanke, his loyal follower, especially, on the Great Depression. While Gerard Debreu, who initiated the price stabilization theory with his study in general equilibrium analysis, is no longer with us, we still have Kenneth Arrow to understand the solution of value. Also, we have Paul Solman with his numerous Nobel Prize winning friends and his intensive pursuit of knowledge, which, not money, holds the permanent solutions to all our problems.

Good work and thank you Paul for the contribution to knowledge from the media. ### Hugh Ching, MIT SB, SM, ScD, Post-Science Institute 11-21-2008 (to be submitted to the Fed)

The problem here is that "the assumption that everything is going to grow" is wrong. We have been shown that it is wrong. We are seeing the results of that daily! People realize this is not working, trust is not there, credit is not there, and without credit, we don't grow.

The actual problem is that THERE IS NO MONEY. We have been living in a fiction which inevitably leads to the economic circumstances we are in now. The first step is to acknowledge that our present system is flawed, and is not designed to our ultimate benefit. An interview like this which lends credence to the fraud will not help us gain a truly beneficial solution. We must understand our money, how it is created, and how it traps us, inevitably!, in a cycle of debt, of ever greater boom and bust.

We need knowledge of our situation, Paul! You have the pulpit! Use it!

There is not a clog in the system but instead a lack of blood.

A clog in the system would indicate that there is an obstruction that if overcome would allow capital to flow. This is not the case.

The supply of cheap capital or wealth has finally dried up or been drained from the system.

Wealth or capital can not be created but can be distributed. There is a finite amount of wealth.

When you use capital and resources to develop a product that you sell, you are not creating wealth, but rather gathering wealth that already exists. The wealth of people that buy the product decreases.

Poor investment of the trillions of dollars of cheap capital have created an environment where the finite amount of capital or wealth has been redistributed where it is no longer available for investment.

At one point economic and business concepts have to questioned and understood instead of simply accepted.