So the Texas Board of education got it's way.

[Kasz216]

Akvod said:

Kasz216 said:

Akvod said:

Kasz216 said:

Akvod said:

Kasz216 said:

Most of it seems to be changes that should of been made. With a few changes being puzzling like the afforementioned Jefferson thing.

The economic changes really were mostly needed. Hell most history textbooks still teach us that the New Deal got us out of the Great Depression when 9 out of 10 economists will tell you it prolonged it. As it is now you spend 12 years of your life learning one thing, then once you hit college and take an economics course you learn it's all bunk.

Overall it will probably be a positive with some weird changes. 

I didn't learn that at college... in fact, my professor complained that FDR went half assed with his fiscal policy, and balanced the budget, which resulted in a second recession.

Which, as we've already covered... is totally wrong compared to pretty most economists.  You had a poor teacher that was teaching things contrary to what most economic schools believe.

 

Monetarists, NeoClassical and New Keynsians all agree that FDR extended the depression.

Only NeoKeynsians disagree and they are a marginal force.

 

Heck, a good example can be seen by the "second recession" we appear about ready to go through.  History repeating and all that.

But you never answered my question in that thread. Why did FDR extend the "Great Depression"? He caused a second recession, but that was because he took contractionary policies after listening to Classicalist economists.

It's simple... the "second recession" was really just an extension of the first.  It was't because of contractionary polcicies after listening to classical economists.

We're currently about to go through a second recession with no contractionary policies.

It's just the natural outcome of massive government spending to try and "make up the difference".  It's why even New Keynsians are against it.

It's a simple matter of goverment plans causing immediate crowding out.  The government can't spend forever, and whenever it's stopped, a "second" recession happens which is really just a part of the first.

All government spending does is mask the problem, by hiding it by "defeating" a recession through the numbers.

As soon as the spending stops, no matter when you stop it... (and eventually you do) things drop back down to where it was, until a normal fix can happen.

All government spending does is delay the "normal" fix and delay peoples misery.

I believe we're about to enter a second recession, not because of our defeceit spending, that was intended for a short period of time, versus Europe's, which was undertaken for years, before the recession.

Inflationary policies, when the economy is already is in its long term output, is not Keynesian. Keyensianism accepts NAIRU and that all such things can do is cause inflation. It also is simply common sense that you can't run defeceits forever, and that you need to have surpluses. All I'm saying is it makes no sense to try to balance the budget, in the worst time possible. It's so counter intuitive.

 

 

All this boils down to, I think, is your reluctance to identify yourself, what a "normal" fix is. It seems that you yourself don't understand what it means. I believe that recessions are primarily caused by demand shocks. Although such shocks may have been caused by things such as the housing bubble, the dividends bullshit, etc, such things aren't the actual cause of the recession. A crash in the stock market or real estate market, affects your wealth, but with sticky wages, shouldn't affect your income. There is a reduction in wealth, but everyone should still be able to buy the same ammount of stuff they bought. And what happens when we lose a bunch of wealth? We cut back on spending, consumer spending.

Until consumer confidence returns, and it will, I believe it makes sense for government to lower taxes, give stimulus packages, cut interest rates, and increase government spending. Such things will increase output to its normal level, get producers to continue producing instead of liquidating their capital, get people to keep getting their paychecks, and hasten the recovery of consumer confidence.

Once consumer confidence returns, and consumer spending returns to its normal level, then the government can cut back, and begin to worry about raising taxes, interest rates, cutting transfers and spending.

Government spending can't help regain consumer spending due to demand shocks.  Do people buy more due to the government spending?  Yes... then as soon as the government spending stops... they stop buying.

After that tax credit is gone for new cars... nobody wants to buy new cars.  Once the government cuts back, consumer spending and confidence drops back down... because, surprise surpise the reasons to buy no longer exist.

All government spending does is push demand foward, and create a gap later, that requires organic consumer confidence to build back up.

 

Or to put it another way... I usually buy something weekly for 10 dollars.

A recession happens so I stop buying it.

The government decides to offer to go "halfises with me" now it only costs me 5 dollars to buy the thing that used to call me 10 dollars.

The government pulls away the deal.  I stop buying the thing because it now costs me 10 dollars.   Why would I spend 10 dollars when it used to cost me 5?  So now they have to lower the price to 5 to get my money back... problem is, this widget could cost 7.

Government intervention like that only devalues products and creates a new demand shock whenever it's pulled away.  One that is MUCH harder to overcome, because NOW it is a value perception, rather then a perception of supply perception.