| Kasz216 said: Wait, your from the University of Michigan? That makes your economic stance even more confusing... as far as I know... the University of Michigan is a "freshwater" economics schools that rejects Keynsian ideals even more then Monetarists and the like. |
So it's all just your fucking word play. Let me ask you, if there is a 100 billion dollar recesionary gap in the economy, there is a MPC of 0.5 (for now, just assume everyone has the same MPC), then will not a increase in government spending of 50 billion dollars close it?
Yes or no?
If yes, then we agree on the only thing I was talking about. I have no fucking say on the "true" nature of recovery. I'm only going to stick with what I learned, and the objective measurement of the economy, rGDP, how much shit we produce.
I can go on and say how this is to expediate the return to consumer confidence (if the economy is doing as or nearly as good, and they're still getting pay checks, they will think their life time wages are the same, and will return. Plus, if the stock markets rebound, their wealth will increase again), but still, that's beyond my point.
Can not, an increase in G, increase GDP?
I don't give any shit about whatever else you say. Our economics classes don't try to theorize what's "true" recovery. My true recovery is to get the country to produce as much as it can before the recession. Output=Income. If the output is the same, income is the same, people feel that their life time wages are secure. In addition, there'll be a recovery in asset values. Therefore, eventually, Consumer consumption will go up, in which case we can cut back on government spending.
And yes, consumer confidence is indeed "illusions". Even though nominal wages are the same, people spend less than they could. We want them to spend just as much as they would before the recession. You may say that it's rational or reasonable to start saving whenever there are bad times. This is the Paradox of Thrift.
