Keynesian economics states that you run a surplus in good times and then defect spend like no tomorrow to pull yourself out of a cyclical recession. I doubt it works very well if we deficit spend in good times and then anit-spenders come out of the woodwork during a recession. Lets bail out the auto industry, people!
| Hawkeye said: Keynesian economics states that you run a surplus in good times and then defect spend like no tomorrow to pull yourself out of a cyclical recession. I doubt it works very well if we deficit spend in good times and then anit-spenders come out of the woodwork during a recession. Lets bail out the auto industry, people! |
Keynsian economics does work if you actually follow it (but we don't). Obviously there are certain situations which Keynsian economics can't cope with, and there are certain ideas from the original Keynsian models that should be abandoned.
For instance, sometimes supply side economics is very helpful when you run into stagflation.
Friedman style classical economic theory has some great ideas about when to use regulation and when to not use it, which anyone following a Keynsian model should consider.
But all in all the Keynsian model is still a strong one if you are willing to incorporate ideas from the other approaches since the Keynsian model can't solve every problem that is thrown at it (just as the other models can't solve every problem thrown at them).
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
Regardless of how much money the government spends:
Until the economy is on more solid footing it is moronic to throw money at it to try to fix it; it will only result in a higher national debt which will slow down the recovery.
People are suddenly aware of how much money the government is spending, and they care now, because of how insane it has become.
| Hawkeye said: I blame bush. He cut taxes AND raised spending. |
The President of the United States can not cut taxes, or raise spending. That's what Congress is for.
| HappySqurriel said: Regardless of how much money the government spends:
Until the economy is on more solid footing it is moronic to throw money at it to try to fix it; it will only result in a higher national debt which will slow down the recovery.
People are suddenly aware of how much money the government is spending, and they care now, because of how insane it has become. |
This ^^
Also, to respond to #2:
Banks now have a lot of surplus to spend, they just are not lending. The reason is not a lack of funds, but a lack of understanding on who is a good risk. You don't loan money to high risk businesses, regardless of how much you have. With the government stepping in to make sure no one fails, banks can no longer intelligently decide who is a good risk and who is not. We have bankruptcy laws in place to allow businesses to restructure, and add transparency. Currently, Washington does not want anyone to fail, the transparency is lost.
Capitalism without risk, never works. This is what Washington is trying to accomplish.
I hope your not talking about me.
Either way. I'm hoping somehow the democrats evolve into a more fiscally responsible and less wasteful group of people.
It's probably easier then turning the republicans around on social issues... AND some economic issues.
| TheRealMafoo said: Capitalism without risk, never works. This is what Washington is trying to accomplish.
|
Exactly. If companies are going to be free to succeed, they must also be free to fail. Plenty of once-successful companies have failed and the world had not ended. If AIG or GM goes bankrupt, our economy will not collapse. But the government would rather save today's jobs at the expense of tomorrows, plus huge additional costs and stagnation, not to mention uncertainty, caused by political interference in even more parts of the economy than they already had interfered in. Like the New Deal, this is destined for an expensive failure. Congress should never have approved the original bailout.
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elprincipe said:
Exactly. If companies are going to be free to succeed, they must also be free to fail. Plenty of once-successful companies have failed and the world had not ended. If AIG or GM goes bankrupt, our economy will not collapse. But the government would rather save today's jobs at the expense of tomorrows, plus huge additional costs and stagnation, not to mention uncertainty, caused by political interference in even more parts of the economy than they already had interfered in. Like the New Deal, this is destined for an expensive failure. Congress should never have approved the original bailout. |
Can we place bets on when the thread will go off topic?
I think you guys underestimate how bad it would have been if the entire financial sector crashed. I'm not saying the original bailout was well-implemented or well-planned at all, but if the financial sector as a whole crashes, its like creating a black hole in the center of the economy. It could literally destroy the economy as a whole.
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
| akuma587 said: I think you guys underestimate how bad it would have been if the entire financial sector crashed. I'm not saying the original bailout was well-implemented or well-planned at all, but if the financial sector as a whole crashes, its like creating a black hole in the center of the economy. It could literally destroy the economy as a whole. |
I don't underestimate it, I just don't think what the government did had any positive impact on it.
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