What is your position on gov't....??????

What is your view????

  • Total voters
    0
#179
#179
To help TT out after he killed this thread...

Here's a few questions for the Keynesian devotees in the house.

1. How do we know when to stop the stimulus? Presumably, govt. stimulus gets the economy revved up. Too much revving and we risk the next downturn. When is it time to stop? Before the recession is over? When it's over? After it's over? How do we know when it is over? How do we know when it is almost over?

2. How does Keynesian economics account for political realities? In other words how does it recognize the real world tendency of politicians being able to give but not take away? Would it recommend less deficit spending since spending becomes in effect permanent and thus is detrimental in times of strong economic growth? Does it ignore political realities for the theoretical view that government spending can expand and contract at will? Can any Keynesian demonstrate how government spending can actually go down in times of rapid economic growth - if not, is the answer "well they just aren't practicing Keynesian principles?"

3. How do Keyensian theories adapt to a global economy with some economies in recession and other not in recession at the same time? Do the same rules apply? What should be modified if capital, labor and demand are mobile outside the economic system applying Keynesian principles?
 
#181
#181
OrangeEmpire said:
Simply put, no, all you have our textbooks and graphs.

Not how the real world works.

You'll find this out in about 6-10 years.
Click to expand...

Textbooks and ideas make the world go around. What you learn in school, well some of it... is what you are today.
 
#182
#182
paul1454 said:
No problem. I enjoy the debate.

One correction to your above post is that Friedman did not patently oppose regulation. To the contrary, he was very much in favor of regulation of market inefficiencies (i.e., externalities). However, his regulatory scheme was less of a "goverment sets the standards" type of regulation, and more of a "let's tax the externalities and make them expensive, so they are factored into the equation - rather than blindly imposed on third parties." A lot of people do not know this, and attack free-market economists such as Friedmen for their condemnation of regulation - so I don't fault you for it. They simply believed that regulating should only be imposed to attack inefficiencies, and that government regulation should only incentivize efficient activity - not make feeble attempts to define and enforce it.
Click to expand...

Forgive me, I am not a expert on the Chicago School/Freshwater, and I have yet to read Capitalism and Freedom. I can not be convinced however, that in times of crisis inflation, unemployment and output would adjust themselves according to market demands. And even if I may not have a complete understanding on his economic system, I don't see it doing enough through spending or regulations/interest rates. I don't know if your from the Chicago School or not, but I have seen my interpretation of his theory fail, as evidence in the 1980's Bank of England mess. And when in the early 80's Volcker controlled interest rates tightly by raising them to combat inflation, and then abruptly slashing interest rates and preceding to flood the economy with money. Not to forget that Reagan cut taxes heavily, and spent a great deal on a military buildup.

But again this dates back to philosophical differences, and there is obviously going to be disagreements in who is right and who is wrong, I happen to see Keynesian economics as the best possible option.
 
Last edited:
#183
#183
volinbham said:
What is the Keynesian's answer to the Warren Harding approach for the 1920 recession? He implemented the basic opposite of keynes and the recession ended quickly followed by rapid economic expansion.

What is the Keynesian's answer to the Japanese situation - slashing interest rates and massive extended government stimulus? I'm guessing the answer I'll get is that they weren't aggressive enough. Hard to prove.
Click to expand...

1. Do you believe that doing nothing to a financial problem will always work? There is a small, actually very small chance of that working. If the United States followed Harding's approach to the Great Depression, 80's recession, 2008, our country would no longer exist. What about 1837? The Panic of 1873-79?

2. The Keynesian's answer to the Japanese situation? Japan was quite clearly in a Liquidity Trap - people refusing to spend enough, and had few options in terms of monetary policy, but as I have mentioned before, and I don't see it as a crazy idea in terms of crisis, they could have lowered the real interest rate even more by creating expectations of inflation. But the main problems of Japan was a need for structural reform. Japan was in a trap of deflationary expectations; private-sector financial problems dampened the effects of the monetary policies tried in Japan, and government debt made Japanese policymakers more reluctant to use aggressive fiscal policies. You are correct in your assumption that they didn't go aggressively go after the crisis enough, fiscal pump-priming is the textbook solution to a Liquidity Trap, even pump-priming became ineffective at times without strong structural reform in Japan. Public spending prevented a weak economy from plunging into an actual depression.
 
#184
#184
OrangeEmpire said:
All jr cares about is spending tax payer dollars on non sense. It makes him feel like he accomplished something.

To say social programs are more important than military is assinine.

Typical military hater until something bad happens then expects the impossible from the our guys and gals in uniform.

Same old crap but a different day. :)
Click to expand...

No, not on non sense.

I don't see how they aren't, military programs are still required, but cuts can be made when you overpower any other military in the world... by a wide margin.

I'm not a military hater, just because I want DOD cuts, does not make me a military hater.
 
#185
#185
volinbham said:
To help TT out after he killed this thread...

Here's a few questions for the Keynesian devotees in the house.

1. How do we know when to stop the stimulus? Presumably, govt. stimulus gets the economy revved up. Too much revving and we risk the next downturn. When is it time to stop? Before the recession is over? When it's over? After it's over? How do we know when it is over? How do we know when it is almost over?

2. How does Keynesian economics account for political realities? In other words how does it recognize the real world tendency of politicians being able to give but not take away? Would it recommend less deficit spending since spending becomes in effect permanent and thus is detrimental in times of strong economic growth? Does it ignore political realities for the theoretical view that government spending can expand and contract at will? Can any Keynesian demonstrate how government spending can actually go down in times of rapid economic growth - if not, is the answer "well they just aren't practicing Keynesian principles?"

3. How do Keyensian theories adapt to a global economy with some economies in recession and other not in recession at the same time? Do the same rules apply? What should be modified if capital, labor and demand are mobile outside the economic system applying Keynesian principles?
Click to expand...

You mean the Keynesian devotee, I'm out numbered 30-1.

1. How do we know? When the National Bureau of Economic Research says it is, just kidding. Well to begin with, the first stimulus was too small, our inflationary levels are very, very low, and we face a danger of having to create a second stimulus, because the first one was not large enough. However, that is not to say that Industrial production is rising, and GDP is almost certainly rising. So the economy has technically stopped shrinking. Since unemployment numbers still remain high, and if you factor in that unemployment rate is hovering around 17% [factoring in part-time jobs], I think there will still be a need for a second stimulus.

fiscalimpact0.gif


2. Politicians shouldn't be making economic decisions. They don't run the federal reserve, or make fiscal policies, in theory they do, but there is a reason they appoint/hire people like Geithner, Bernanke, Romer, Volcker, etc. I'm sure Obama has a basic grip on what his economic policies are, but in anything other then basics has no idea. Less deficit spending is required only when the recession is over [1.]. That said, you don't want to save, and that distorts aggregate demand. It is hard to judge how our past decade would have went in terms of deficits/surplus when you factor in two wars, a prescription drug bill, a no child left behind act that is currently under stages of reform, and tax cuts that weren't required after the mini-recession was over. That is the bad part, politicians shouldn't be deciding economic decisions, and I think that is evident of Japan's conundrum in the 90's [ A reluctance to spend] and irrational decisions in the past decade. This logic applies to all economic theories however, Austrian, Keynesian, Chicago, it doesn't matter. How do you determine rapid economic growth? GDP? Employment Rates? According to the GDP scales the United States had rapid economic growth in the 40's-60's, with supposed Keynesian economic thinking running the country. Economic growth is self-adjusting to an extent, and the markets obviously have cycles of "bull and bear", but that is why the govt must intervene and control the money supply, why would you not want to control the direction of the market? The government intervenes to level out the cycle by aggregate demand management - interest rates, taxation, and spending - basic Keynes.

3. Most recessions now days occur around the same time, with economies struggling. I don't see the rules changing, considering how Keynesian thought is adapted in most western countries.

In the long run, we are all dead.
 
Last edited:
#186
#186
bam15 said:
You mean the Keynesian devotee, I'm out numbered 30-1.

1. How do we know? When the National Bureau of Economic Research says it is, just kidding. Well to begin with, the first stimulus was too small, our inflationary levels are very, very low, and we face a danger of having to create a second stimulus, because the first one was not large enough. However, that is not to say that Industrial production is rising, and GDP is almost certainly rising. So the economy has technically stopped shrinking. Since unemployment numbers still remain high, and if you factor in that unemployment rate is hovering around 17% [factoring in part-time jobs], I think there will still be a need for a second stimulus.

fiscalimpact0.gif


2. Politicians shouldn't be making economic decisions. They don't run the federal reserve, or make fiscal policies, in theory they do, but there is a reason they appoint/hire people like Geithner, Bernanke, Romer, Volcker, etc. I'm sure Obama has a basic grip on what his economic policies are, but in anything other then basics has no idea. Less deficit spending is required only when the recession is over [1.]. That said, you don't want to save, and that distorts aggregate demand. It is hard to judge how our past decade would have went in terms of deficits/surplus when you factor in two wars, a prescription drug bill, a no child left behind act that is currently under stages of reform, and tax cuts that weren't required after the mini-recession was over. That is the bad part, politicians shouldn't be deciding economic decisions, and I think that is evident of Japan's conundrum in the 90's [ A reluctance to spend] and irrational decisions in the past decade. This logic applies to all economic theories however, Austrian, Keynesian, Chicago, it doesn't matter. How do you determine rapid economic growth? GDP? Employment Rates? According to the GDP scales the United States had rapid economic growth in the 40's-60's, with supposed Keynesian economic thinking running the country. Economic growth is self-adjusting to an extent, and the markets obviously have cycles of "bull and bear", but that is why the govt must intervene and control the money supply, why would you not want to control the direction of the market? The government intervenes to level out the cycle by aggregate demand management - interest rates, taxation, and spending - basic Keynes.

3. Most recessions now days occur around the same time, with economies struggling. I don't see the rules changing, considering how Keynesian thought is adapted in most western countries.

In the long run, we are all dead.
Click to expand...

You've just demonstrated where theory and application diverge.

1. The effects are not instantaneous. There is debate about what it means for a recession to end and unemployment, inflation, and economic growth change at different times with different time intervals. To say you apply stimulus (ala Keynes) basically until you don't need it any more begs the question of how do we know when we don't need it any more.

It's a critical question since the boom-bust cycle is something that economists and politicians want to manage. Heating up a growing economy is the WRONG thing to do using economic theory and it is will show in the next bust cycle. However, the theory doesn't allow us to precisely turn on and turn off the stimulus.

Nice in theory but the theory can't be apply exactly as prescribed due to 1) an inability to know precisely what is going on in the economy and 2) the structural impediments to instant policy switching.

2) You can say politicians shouldn't set economic policy but THEY DO. It is a reality that must be factored into economic models otherwise the theories may be pretty, elegant or whatever but they are incomplete. The more they rely on the economist crutch of "certas paribus" the less useful they become for dealing with complex, real world problems.

3) Again we have theory, assumptions and we have reality. In a globally connected economy with all players in recession, all would need to enact the same stimulative policies to get your Keynesian miracle. See number 2 above - there is no World Chief Economist that sets each countries economic policy to match. Furthermore, not all countries are in recession at the same time. China is not in recession. Our trade policies with other countries could reinforce or mitigate the impact of stimulative spending.
 
#187
#187
bam15 said:
No, not on non sense.

I don't see how they aren't, military programs are still required, but cuts can be made when you overpower any other military in the world... by a wide margin.

I'm not a military hater, just because I want DOD cuts, does not make me a military hater.
Click to expand...

Go ahead and own up to it.


:eek:k:
 
#189
#189
volinbham said:
You've just demonstrated where theory and application diverge.

1. The effects are not instantaneous. There is debate about what it means for a recession to end and unemployment, inflation, and economic growth change at different times with different time intervals. To say you apply stimulus (ala Keynes) basically until you don't need it any more begs the question of how do we know when we don't need it any more.

It's a critical question since the boom-bust cycle is something that economists and politicians want to manage. Heating up a growing economy is the WRONG thing to do using economic theory and it is will show in the next bust cycle. However, the theory doesn't allow us to precisely turn on and turn off the stimulus.

Nice in theory but the theory can't be apply exactly as prescribed due to 1) an inability to know precisely what is going on in the economy and 2) the structural impediments to instant policy switching.

2) You can say politicians shouldn't set economic policy but THEY DO. It is a reality that must be factored into economic models otherwise the theories may be pretty, elegant or whatever but they are incomplete. The more they rely on the economist crutch of "certas paribus" the less useful they become for dealing with complex, real world problems.

3) Again we have theory, assumptions and we have reality. In a globally connected economy with all players in recession, all would need to enact the same stimulative policies to get your Keynesian miracle. See number 2 above - there is no World Chief Economist that sets each countries economic policy to match. Furthermore, not all countries are in recession at the same time. China is not in recession. Our trade policies with other countries could reinforce or mitigate the impact of stimulative spending.
Click to expand...

+1

:hi:
 
#190
#190
volinbham said:
You've just demonstrated where theory and application diverge.

1. The effects are not instantaneous. There is debate about what it means for a recession to end and unemployment, inflation, and economic growth change at different times with different time intervals. To say you apply stimulus (ala Keynes) basically until you don't need it any more begs the question of how do we know when we don't need it any more.

It's a critical question since the boom-bust cycle is something that economists and politicians want to manage. Heating up a growing economy is the WRONG thing to do using economic theory and it is will show in the next bust cycle. However, the theory doesn't allow us to precisely turn on and turn off the stimulus.

Nice in theory but the theory can't be apply exactly as prescribed due to 1) an inability to know precisely what is going on in the economy and 2) the structural impediments to instant policy switching.

2) You can say politicians shouldn't set economic policy but THEY DO. It is a reality that must be factored into economic models otherwise the theories may be pretty, elegant or whatever but they are incomplete. The more they rely on the economist crutch of "certas paribus" the less useful they become for dealing with complex, real world problems.

3) Again we have theory, assumptions and we have reality. In a globally connected economy with all players in recession, all would need to enact the same stimulative policies to get your Keynesian miracle. See number 2 above - there is no World Chief Economist that sets each countries economic policy to match. Furthermore, not all countries are in recession at the same time. China is not in recession. Our trade policies with other countries could reinforce or mitigate the impact of stimulative spending.
Click to expand...

Hey, I'm glad someone else managed to vote along with me! :rock:

This is all I need to know in terms of economics. :thumbsup:

generaltheoryofeploy.jpg


isbn.aspx


9780393333138.jpg


krug1.jpg


advanced-macroeconomics.jpg
 
#191
#191
OrangeEmpire said:
Go ahead and own up to it.


:eek:k:
Click to expand...

When we spend in excess of 800 billion on our military, and the second closest is China, with 80 billion, you know cuts can be made.

That doesn't mean that I don't respect our military, trust me I do.
 
#193
#193
Bam, why would you limit yourself to one particular theoretical approach to economics?

I can guarantee you that is not "all you need to know" about economics unless all you plan to do is post adoring descriptions of Keynes and Krugman.

If this is all we need to know about economics, why do economists who disagree with these theories also get published and receive Nobel Prizes?

Open your mind.
 
#195
#195
bam15 said:
When we spend in excess of 800 billion on our military, and the second closest is China, with 80 billion, you know cuts can be made.

That doesn't mean that I don't respect our military, trust me I do.
Click to expand...

Without them you don't get to complain about our gov't not being in our lives enough.

:eek:k:
 
#196
#196
Bam, you should read up a bit on the theory of "public goods" and its criticisms. I'm sure you already have at least an introduction to the topic, but I think doing a little more in-depth research on the matter may lead you to questioning whether the government is best suited for some of the programs in which it currently provides. One piece of advice I would offer is to look at differing sides of the argument so you can make a better informed decision as to your stance on what constitutes a public good and how that compares to the goods currently provided for by the government.
 
#200
#200
volinbham said:
Bam, why would you limit yourself to one particular theoretical approach to economics?

I can guarantee you that is not "all you need to know" about economics unless all you plan to do is post adoring descriptions of Keynes and Krugman.

If this is all we need to know about economics, why do economists who disagree with these theories also get published and receive Nobel Prizes?

Open your mind.
Click to expand...

Maybe I want to post adoring descriptions of Keynes and Krugman. :birgits_giggle:

Just Kidding

I've honestly been trying to read some of the works from the Ludwig Von Mise's institute, but it goes against everything I believe in, I wouldn't have much luck reading Glenn Beck's books either.

I'm not necessarily saying that Keynesianism is the only system, but I believe it have less flaws then any other system. After all, Keynes is the father of Macroeconomics.
 
New posts
You must log in or register to reply here.

VN Store



Back
Top