I think its pretty well established that in your typical recession, the Keynesian pump priming doesn't work too well with low multipliers and crowded out investment. In the liquidity trap/balance sheet recession like now and Japan's, the collapse of private investment and spending can be offset with government spending until debt overhang is gone and the private sector take all that liquidty in the system and borrow/invest/spend again.
@Distortion0 The more the government spends the bigger it gets, the only way a government can commence public works of that kind is if it's already large enough to do it in the first place.
@grampacanuck no it did not but new deal policies were stop and people save up. America was the only industrial economy left standing undamaged. this let to boom until developing counties could complete in 1970's
Only the FDR Glass-Steagall principle will separate commercial from speculative banking, thus freeing the nation from obligations to Wall St. and the City of London, and re-establishing a credit system for rebuilding the nation.
H.R. 1489, Return to Prudent Banking Act of 2011, is before the House of Representatives, which aims to revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so called 'Glass-Steagall Act
@tepstolog the repeal of the glass steagall act didn't cause the housing collapse nor the recession... as a matter of fact the glass steagall act actually ties the government even more with wall street by being forced to bail out their depositors under the FDIC contracts... regulations like that along with CRA and other government regulations caused the collapse... that along with the FED setting interest to low... we need to stop regulating the markets since its causing the collapse...
There is one point which the anti-keynesians keep missing. A point which is my favorite point(i came up with it). Even if this keynesian "stimulus" did work(which it doesnt) it still wouldnt help.
Why might you ask? Good question. Look at where youre buying all your goods from. China, Japan, Germany, Canada etc etc. Keynesian hypothesis would only work in a closed system or a system where the people were chosey over local goods!
@N But like the video says. Taking money out of your right pocket and putting it into your left doesnt make you rich. And borrowing the money only to pay an interest on it is even worst!!
And WW2 is the Number Fallacy as i like to call it(like the broken window), By causing massive inflation and counting those numbers like it was real GDP is moronic. Zimbanwe is a success if you use that perspective.
There was massive shortages for everyone in WW2. Food clothing etc. Count products Not numbers
Wait ... economic activity went up and unemployment went down with the advent of WWII? What is a war, especially of the magnitude of WWII? It is a giant example of Keynesian spending - the government went into debt to give consumers money (either as weapons manufacturers or as soldiers) and these in turn bought the (somewhat limited) range of available goods.
If this isn't an example of Keynesian economics getting the economy going again, then what is it?
Fact is, Keynesianism, if implemented correctly, works, unlike the failed economic policies of the IMF, which have been disastrous wherever implemented (Ireland and Greece are dead). In Argentina, Keynsianism saved the nation from oblivion. The biggest waste of government money is Corporate Welfare. The state should either intervene directly or not at all; no taxpayers money should ever be given to private companies, for that is corporatism. End all Corporate Welfare.
This is no different than the global warming deniers and the "intelligent-design" crowd. False ideas that are peddled to people who want to be lied to. Conservative movements across the World often develop their own mythologies because they cannot stand up to reasoned debate and logic. Dream on
@jimboedwardlee have as a result is tender that has no value thus what you own is of no value. Confidence is how legal tender is accepted. What you are seeing now is a tipping point. One that those of us that know have seen coming for years. Before I was born this was being forewarned. Remember the Federal Reserve has only been around for less than 100 years. When the worlds currency collapses it will be studied as the worst idea in human history. That or we go to global currency. Then p3
Spending is not an accurate or appropriate measure of the strength of an economy.
Production is a better measure of economic activity and strength. And as all but the most clueless of mullet-wearing morons understands... Government produces nothing.
Keynes was "fighting for england" his project was to use to govt to subsidise the BRITISH economy in order to make it stronger in the global competition within the tight context of poswar decolonisation, (and also to temporarily boost the standard of living of the working and middle classes in ordre to dissipate socialist tendencies within the population that threatened to take a revolutionnary caracter given the prestige of USSR at the time).
He was working for you boys ! only in a smarter way.
@Longlivethe4th more concretely, the money spent by the govt was supposed to come from the market shares taken to the US, Germany etc, in this GLOBAL context, a keynesian solution is a working solution for an advanced state, albeit a cynical, nationalistic one wich enventually fails, like any other nationalist-capitalist solution.
Well i think Keyens was concentrating on the idea of post war economic development. Where government fulfils need. Where in the UK certainly he was right
@SirOneoneselfandone No he was not. Monetary policy only succeeds in inflation under the Keyensian theory. You cannot stimulate an economy based on aggregate demand is unchanged. Only free production can do this. In other words, get out of the individuals way. Do not regulate and tax idealists to death. allow them to try to create prosperity and create jobs leading to MORE aggregate demand. Keyensiam theory came out when? When the world was in crisis. Caused by the US's Federal Reserve
@SuperGuitarman69 You need to study economic history a little better. Conservatives have a mythology that they are peddling that doesn't match up with history. Look at the most Conservative States in our country and look at their economic histories. I rest my case...
@jimboedwardlee My degree is in economics with advanced studies at the Mises institute. The general construct of what politicians are dealing with now is within the guidelines of Keynesian philosophy. We have a central banking system in which causes an unnecessary set of problems. Within the flawed Keynesian system the conservatives being for limited taxation and common sense. History is clear. Look at what happened since the emergency federal reserve act. The history is crystal clear.
@SuperGuitarman69 Ok - explain to me how a post-modern economy can function without a central bank and give examples of success. What happens to the middle class under your construct - does it shrink or expand?
@jimboedwardlee It functions based on backed currencies. The world used to be in a barter system. Back then everything was worth something. Now that we have a central banking set up all over the globe you have no examples of backed currency hence the fluctuations in values of individual currencies. You simply cannot print money of no value but we we do. In the trillions. Everything you see is fake. You base it on the value of what the dollar is in this country. In regards to the middle class p1
@jimboedwardlee On your global warming deniers? 8 years ago 81% believed global warming was real. 4 years ago, 56%, 2 years ago 31%. I'm curious to see what those numbers are now. The IPCC has been caught in fraud. The vast majority of scientists either say it is not any alarm at all or does not exist. Some in the field of botany contend it is HELPFUL to the environment. You seem to be a leftist. Truth matters not to the leftist. Only the agenda
@SuperGuitarman69 I don't care what the public believes about global warming- have you seen the economic and scientific literacy rates of the American public? Are you even aware - LOL! The average American cannot even pass a basic information test on either science or economics. Calling me a leftist is just a name - It means nothing to me. The veracity of your statements are weak. You say that the vast majority of scientist say it doesn't exist or are not alarmed is a lie.
@jimboedwardlee No it is not a lie. At least have the decency of calling them paid off by big oil or something. To say they do not exist is totally false. Those continuing on that path that has been marred is amazing to me. I don't blame you not liking titles. I do not either. I do not consider myself libertarian or conservative. I am a realist. I look for truths
@jimboedwardlee it is tough to hear this I know,but it is reality. There is actually no such thing as middle class and rich. It is propelled into existence by what is perceived value. This is where I started seeing the problem way back in college. In a macro vision of the economy we can see class. But when you look on the side of the street that is unlit and you have a flashlight it is a much different picture. If money is backed by nothing then what you own is backed by nothing. What we p2
@jimboedwardlee you will see a depressed economic world. Where you have producing nations and non producing nations "spreading" the wealth around. Everyone living the same and under the control of one large central government. The constitution and all it stands for in the ashes for the "common good". That isn't right it isn't fair and there will be a global revolt. But I've seen the left in action. Seems they want that world!
Government can divert profit from going into the hands of of people who create all the wealth (goods and services), not to mention the jobs. Socialist/Communist are very popular with people. The productive capacity unrealized, and wealth never created is easy to dismiss. Government doesn't know anything. It's the Robin Hood myth. Private sector rubs two pennies together to create a nickel. Government steals three cents, mis allocates it, consumes it, and borrows against it. And feels great!!!!!
@Kevashida I'll reciprocate to your opinion with my own. When you foist your ideas into the world, take the time to explain them. If you state the opinion as you do "the worst crashes in ecmonics do not come when government interfere with markets" as if it were an undisputed fact commanding to be reckoned with in an of itself. I perceive it as another loud and vociferous opinion based on hearsay. Did you subject this theory to critical examination? Did you discover any opposing theories?
@66chevyo Okay, Let's not go to the two largest crashes in the US.Yes, recovery took years in 29 and it is not clear if or when we will recover today. But let me ask you this, would not collecting taxes fit into your idea of a hands off government? Would that make the best economic model?
@Kevashida The panic of 1819 was America's first great economic crisis. The government did not interfere, the price mechanism redistributed resources where they were needed. The economy restructured and began growing after one year. The panic was as severe if not more so than the "great depression" of 1929. When the State assumes increased control over Society's resources, the resources are mis allocated. Only supply and demand, through the price mechanism can determine value with accurately.
@Kevashida The state should spend what it collects in taxes. A national sales tax could easily right the imbalance in Federal taxes/expenditures. Productive investment would labor unmolested, and people would feel incentive to under-consume. This underconsumption would increase savings and productivity. The current problems were produced by Socialism. A central bank with State power. A state which pretends to "provide" with force instead of protecting with force. The U.S. needs Capitalism.
this man is utterly destitute of any intellectual rigor whatsoever!!! sure, keynesianism has inherent weaknesses, but that chart he showed was just plain stupidy. i bet this guy hasn't actaully read the general theory of employment, money and interest.
i meant he did not have the metrics we had today. he actually used to compile a lot of his own data according to skidelski's book citing letters and correspondence of the time.
Firstly the Great Depression was a disaster not least because monetary policy was not co-ordinated with fiscal policy. Secondly, just because Roosevelt's New Deals didn't save the economy it did mitigate some of the effects. Imagine 1930s America without any stimulus at all?
Thirdly, the analogy with Japan is ridiculous. The Japanese economy only keeps going with the demand management being operated by their government. Without this the savings glut would cause a catastrophic recession in Japan
Keynesianism suggests ''counter cyclical'' policies i.e. during a boom fiscal policy should be contractionary, and during a recession fiscal policy should be expansionary. Expansinary policies being 1)increase in government spending 2)decrease in taxes. Contractionary policies being 1)decrease in governement spending 2)increase in taxes. Keynesians see Herbert Hoover's June 1932 TAX INCREASE as making the Depression WORSE. This video is misleading and not telling the facts. *Thumbs down*
@graw81 The true success of Keynesian policy can be seen at the onset of World War II, which provided a kick to the world economy, removed uncertainty, and forced the rebuilding of destroyed capital. Keynesian ideas became almost official in social-democratic Europe after the war and in the U.S. in the 1960s.
@graw81 Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is policies which acted against the tide of the business cycle: deficit spending when a nation's economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays.
@graw81 Deficit spending is not Keynesianism. Importantly, and as I have already mentioned - Keynesianism recommends counter-cyclical policies to smooth out fluctuations in the business cycle!
This is such a crude and childish "explanation" of Keynesianism, its good evidence that no one at CATO has even read or seriously investigated the General Theory of Employment, Interest, and Money that they claim to be debunking here. There is nothing in Keynesianism that says taxes should be raised in a recession, or that tariffs are good, this is just a cheap re-hash of the famous "Treasury View" with some incorrect information.
This is such an utterly false representation of what Keynesianism is. Keynes never advocated tax increases in a recession, never advocated tariffs. And spending by Roosevelt in the New Deal actually did reduce unemployment until he cut spending in 1937. And then, he says WWII ended the Depression, but fails to mention the reason: because the government started spending even more money paying people to build all the war goods and hardware.
There is a major fallacy in this man's argument against keynesianism. The one that was fairly obvious to me was the tax rates. Keynesianism did not advocate for higher taxes during a recession, it advocated for lower taxes during a recession.
I'm a moderate Keynesian but Hayak did not advocate higher taxes he advocated to do nothing to them. Send me the link or a citation that you are referring to. I've never read his primary work, only read his theories in text books and you know how textbooks can be. But I would love if you would show me, that would be cool and a silver bullet in H it were true.
and the United States in the 19th century. There has never been a TRUELY 100% libertarian society, but those that were closest are currently the worlds leading economic superpowers--effectively raising the standard of living of millions of destitute people.
What have progressive liberal policies ever done? The Answer? Nothing. In fact I'd say they were regressive.
Other than civil rights, yes. Those are all typical examples of well-intentioned policies that have a myriad of unintended consequences and terrible results.
@pdaniels9000 yes and continue to be a drain on the econamy and individuallity. case and point; my father is 88 years old peid into social security all of his life. recieves a check for it in the sum of 623.00 every month hardly enough to live on' however if my father would have keopt that monet and invested it in intrest bearing accounts he would be a multi millionaire. all of fdr's policies have failed
id hardly say that ALL of his policies have failed. id say that many of his policies were successful, it's just that over time we have neglected them and therefore have labeled them as unsuccessful.
ooooo...so you want private social security? well think about if you had invested your grandpa's checks into the financial markets in 2008? where would that have gotten him?
@pdaniels9000 precisely my point. The founders intended on individual choice not for government to turn to a nanny state. That's the fundemental flaw in all of those programs. As milton friedman said noone spends money more carefully than the individual does. Government ruined those programs through years of abuse. Proving my point and his.
let's look at the safety nets they have in Western European countries. they have functioning social security systems, national health insurance, better education, etc. maybe it's the attitude of conservatives in our government which ruined those programs.
*and if people spend money carefully as individuals then how do you explain CEOs spending billions of taxpayer dollars on corporate planes? how do you explain Americans consuming mass quantities of food and clothing that they don't need?!?!
@pdaniels9000 Are you an American? If you believe that Western European socialism provides better anything than America? Youre out of your mind. Conservatives didn't ruin those programs. Government did. Plus those programs were wrong when FDR implemented them and kept us in the recession ultimately to the depression. The constitution warns us of govenment interference. It is NONE of your buisness or mine or the government how any CEO or company spends their money.
@SuperGuitarman69 where in the constitution does it warn us of government interference? I'd really like to see an actually clause which says that.
Secondly, that attitude is exactly what got us into this financial crisis in the first place. Maybe if we kept tabs on how CEOs were spending money, we wouldn't have let the financial industry gamble our savings away.
@pdaniels9000 If you are a stockholder an investor or own the company then you have a right to question what is in your companies best intrest in how it should best spend their money.On planes CEO bonuses etc.. It is none of YOUR business if you don't. SHUT UP. Now youre going to pull GM or AIG out and say thats tax payer money i do own it. We never should have bailed them out in the first place. Quit watching MSNBC and CNN and Micheal Moorer. Sit and think for yourself
@SuperGuitarman69 i don't watch cable news FYI, but I'm guessing you watch Fox?
I don't think we should have bailed out AIG and GM, because I don't think you should reward failure. I do think that we should have used a few billion dollars of spending and employment programs (instead of $700 billion) to bail out the shareholders and working class people who were unknowingly affected by the financial crisis though. I call it "trickle-up" economics and we should try it for once.
@pdaniels9000 Trickle up? That means the government has to hand out money. How can they do that? They don't have any. You can only prosper if you have new and expanding business. Lower taxes on individuals and business and instill incentives to open and compete in the market. That creates private sector jobs and gets government out of the pockets of business and individuals. You have freedom and REAL money. Government poor, the people wealthy. Reagan did it and it was 2% unemployment. GROWTH
government takes resources from unproductive industries and redistributes (you probably hate that word) it to more productive industries. tax cuts do help stimulate the economy, but so does government spending.
if we gave money to the people affected by the financial meltdown then the economy could avoid an even further decline and could revitalize financial markets (assets could be liquidated).
FYI government and people are interrelated. stop thinking they are separate entities.
@pdaniels9000 Under Reagan was the biggest expansion in recent American history. 2% unemployment. No stimulous does not work because it isn't REAL money. It's borrowed money being flushed into the economy. Bush tried it failed. Carter really tried it. REALLY FAILED. Reagan cut spending and taxes it boomed the private sector. Government has no money. If you print it it causes inflation. There is no arguing with me. History prooved it. Homeless? The homeless are by choice buddy
@SuperGuitarman69 o yeah, I'm sure the homeless just love not having homes. bottomline, the poverty level was higher under Reagan.
if you really think stimulus doesn't work then I know for a fact that you haven't taken a college level economics course.
but more importantly, do you know that the Fed can take money out of the economy just like it can put it into the economy? the gov't is actually profiting off of the bailout because companies are paying interest on the loans they got.
@pdaniels9000 Have a degree in economics. And perhaps you do not understand Keynesian economic theory? You do not. It's a political left bs move to do stimulous. It never works. Bush did it and it failed. It's not real money and you have a video right here that is explaining that to you
@SuperGuitarman69 the video is bullshit. the point of Keynesian economics is to put money from unproductive sources into productive sources. are you telling me that society is better off if billionaires hide all of their money in a vault? maybe its better that some of that money is used to support the economy.
@pdaniels9000 People who are rich are smart with their money. When they are being taxed to the point that makes their primary decisions. ie. when where how and what country to invest in, they will shy away from promoting growth by expanding or opening new businesses. Which stiffles growth and JOBS. The Dems love this. If unemployment is up, they have their poor in check. It's much easier to get people to sympathize and say government programs are the answer Part 1
@pdaniels9000 To redistribute money. Like this video says. Growth comes in the PRIVATE SECTOR. When you have new investment due to low taxes and tax incentives the rich and business expand and grow and jobs are created. REAL money has value again. Look, you cannot argue this. This isn't a Democrat strength. When it comes to fiscal politics economically they are 180 degrees in the WRONG direction. Please stop debating now and stick to banning salt.
@SuperGuitarman69 well think about how much growth resulted from the international highway programs. those were government programs. besides, growth and GDP aren't accurate ways of measuring a nation's prosperity.
and if you really think we need tax cuts, look at what happened with george bush. he implemented one of the largest tax cuts in history and all it did was increase income inequality and the deficit.
@SuperGuitarman69 and FYI you're a partisan douchebag. how about you think about economics with an open mind instead of trying to use it to justify your bullshit political ideologies.
@pdaniels9000 The jobs that are out there right now are 70% government and 30% private sector. Now let me explain some basic economic theory to you. The private sector has to pay for those jobs. Now how is it that 30% of the people are going to pay for 70%? You cut spending and lower taxes so that private sector jobs are created. God how can the left be that mathematically challenged?
@pdaniels9000 Bureau of labor and statistics. You have to think of all government employees local state and federal. Anyone getting a government check. It actually may be higher now
@SuperGuitarman69 Uh, fact check, Reagan did NOT cut Federal spending, he RAISED IT. Just because he TALKED about a smaller government does not mean he did not actually INCREASE Federal employment and expenditure, growing the government and national debt to new levels. Just saying.
@hoodoo961 No he just raised defense spending. Remember we were in a cold war at the time. That idiot Carter let our country go into the toilet. Um just like Obama is doing now. Anyhoo, His total spending even with defense wasn't even half as much as Carters spending on welfare, government farmer bailouts etc... get the facts straight!
@SuperGuitarman69 Oh I'm sorry I did not realize that Federal defense spending did not qualify as Federal spending. Funny how that works. And no, you can check the data, as I have, Reagan RAISED Federal spending to levels above that of Carter. Again, these are just the facts.
@hoodoo961 Reagan did NOT raise federal spending. The President does not spend the money. Congress Does. Reagan had a Democrat Congress led by Tip O'Neil who promised Reagan spending cuts to coinside with tax cuts - but they spent ever penny of increased revenue.
@MetalDetroit Not true. Do yourself a favor and look up Federal defense expenditures from 1970-1980. Hell, just look up Federal expenditure. Its spikes in the 1980s. You want to blame Democrats for that? Democrats controlled Congress for decades, yet the spending spike started in 1980? You're fooling yourself. It was Reagan's budget busting defense spending.
@hoodoo961 During the 70's the U.S. did nothing to rebuild the military after the Vietnam war. Carter lett he military fall to pieces. It is the responsibility of the President and the Congress to ensure an adequate defense. If you are unable to understand that, that is your problem. Congress increased spending on everything after the revenues skyrocketed after the Reagan tax cuts.
@pdaniels9000 pART 2 See, Bush Sr. lost in a fluke to Clinton thanks to Ross Perot. Clinton started out hard left. Dick Morris (his top advisor at the time) told him if he were to hold onto a 2nd term, after the Republicans took over congress mid way through his 1st term, he would have to sign the contract with America. Cut spending. Reluctantly he did this and sat on his hands. Tech boom helped him. Bush Jr. abandoned conservative principles and became a Dem. Housing boom and wham were (cont)
@pdaniels9000 wham were in a recession. He bailout banks and auto manufacturers. He allowed that moron Frank and Dodd to push him into the housing bill and we crumbled. All 2nd bill of rights bullshit. He was a DEMOCRAT! No Conservative was for him. So if we go back to the Reagan years you will never ever see another arguement for Dem's to be in office. Libertarians yes. They tend to be more on the side of social liberty and are good for America. Democratic party? No they need to go away.FOREVER
@SuperGuitarman69 under Reagan we had higher rates of homelessness and we had rises in crime and drug-related arrests. he was absolutely apathetic to Civil Rights issues and AIDS. he overfunded the military and he increased the gap between the rich and poor with his "Reaganomics" by raising taxes on the middle class and reducing them on the rich. these are arguments for why dems should be in office, because they're not brainwashed by meaningless ideologies like conservatives and libertarians.
@SuperGuitarman69 and by the way. you can't just label george bush a non-conservative because it suits your political agenda. the fact is that he was elected (actually he stole the election) as a conservative politician by conservatives. this is how conservatives function in our system. they over reward their rich friends, they ignore national disasters, they screw the middle class, they balloon up defense spending, and they cause financial disasters.
@pdaniels9000 wham were in a recession. He bailout banks and auto manufacturers. He allowed that moron Frank and Dodd to push him into the housing bill and we crumbled. All 2nd bill of rights bullshit. He was a DEMOCRAT! No Conservative was for him. So if we go back to the Reagan years you will never ever see another arguement for Dem's to be in office. Libertarians yes. They tend to be more on the side of social liberty and are good for America. Democratic party? No they need to go away.FOREVER
@pdaniels9000 lmao "grampa's money," well said. I think
what Keynes's theories lacked was a product of not having the access to numbers we have today. He was a Pragmatist who was willing to change his mind. The conclusions of his Treatise on Money was very different then those in the General Theory. But think, who came up with the idea that confidence has an effect in the economy, confounded the multiplier effect, put to bed this bullshit that there is no such thing as involuntary unemployment.
These people clearly do not understand basic economics. The government can expand the money supply, which can combat economic contractions caused by lending crunches. In general, the video goes something like this: "Let me oversimplify and blatantly misrepresent this theory. Now look at this one graph! Strawman sucessfully destroyed."
The government can only get money through borrowing, or taxation. It has nothing to produce. This money is either take out of the economy or needs to be payed back, at interest.
Yes there is a boom and bust cycle, but the boom is the problem, that causes the bust. Prices get higher then the market adjusts. When has stimulus worked in the past?
@asleeperj The government doesn't only get money through borrowing and taxation - there are other methods. The most blatant of these methods is printing money, which is then usually used to buy back its own treasuries from investors, but it can also decrease the fractional reserve rate required of banks. But more importantly, government is more creditworthy than private individuals, so it can borrow to stimulate the economy. During bust years, the gov't runs a debt, during boom years, a surplus.
First of all, thanks for the video. As a first-year Economics student in the netherlands, this is obviously an interesting and important subject for me to comprehend. However, i think you made a mistake somewhere (i could be very wrong as i'm new to this whole keynesian theory so be light on me).
Aren't you forgetting to take the multiplier effect into account? (as you said that taking money from the economy and putting it back in won't make any substantial difference)
@patatmetkip The whole point is that the multiplier effect cuts both ways. Reduced business investment multiplies the damage by the same factor as any spending could by the government. The only way stimulus can possibly work is if the government borrows money to spend on capital that private industry refuses to purchase. That is, the money is available for lending, but people won't borrow at any interest rate that covers the cost of lending.
Great video! If we keep going the way we're going with "big gov.'t, then our great country will no doubt falter, and who knows how far we will fall?! I hope we come back to our senses soon.
I am so tired of leftist keynesians and even conservative keynesians which includes supply siders. Austrian economics is the future. they have the track record that make keynesians blush. Viva Market liberalism!
Can you give me one example of a mathematical model which supports Austrian Economics? You probably can't because it is a purely political school of thought filled with unjustified pre-conceived notions.
Keynesian economics is not a movement that has to be forced through political means. It's just a basic theory of economics which can be used to maximize an economy's productivity.
If there logical arguments are not getting through; than perhaps you can at least acknowledge that it was the Austrians who predicted our current state of affairs as far back as 2002. Your Mathematical models a joke
C+I+G=Y Keynsians off the bat have a BROKEN MODEL
Why?
BECAUSE THEY FAIL TO REALIZE THAT THERE IS A TRADE OFF IN THE ECONOMY BETWEEN "C" and "I" they cant be lumped together!!! furthermore they never got a chance to dIs-aggregate "C" they never got the whole TIME PREFERENCE thing
Keynesian=clumsy agrigations with no bearing on reality
Austrians= Finesse
The only reason Keynesians dominated the 20th Century was mostly due to the vital role they bestowed on GOVERNMENT. Giving politicians cover to run roughshod over the economy.
Keynsians---Recession is to be resisted
Austrians----Recession is the cure for all the imbalances that occurred during reckless inflationary boom
Results:
Keynsian--- MORE OF THE SAME
Austrian------Kick the ignorant keysian mis-managers out !
Can you give me 1 example of a Keynesian model that actually WORKED to predict this mess that THEY gave us?
What good is an "economist" if they don't have a working understanding of the economy? If we weren't in such desperate times I'd laugh at these clowns. Rather I fear for what they're planing to cram down our throats next. Who knows what their next desperate experiment is in the works? I'm certain though, when the dust settles, no one will association with the 100 yr experiment of Keynes
It cannot work. it makes no sense. I dont care how many C+I+G=Y's you through out. It takes the human out of the picture. Humans don't make rational decisions. furthermore, it is in fact, and in practice a broken theory to begin with.
Hayek owns. always has always will. Because it makes sense.
Yeah the united states. the fastest growing economy when the federal government had little involved in the affairs of the market place. Other than that, there have been no others.
Let's see we financed our Revolution with paper currency. From the foundation to 1865 we had slavery. We stole mass quantities of land from Native Americans and Mexicans. Women, non-whites, and religious minorities were denied basic rights until the 20th century. We had no gaurantee of clean air or drinking water until the 1910s. And yet we were libertarians all that time???
most of the problems that you address here were the consequence of some form of GOVERNMENT action. for instance "WE" did not confiscate any native lands, the GOV did. Furthermore the American society, up until the "progressive" takeover and transformation of the Democratic Party, generally ascribed to "libertarian" principals. Although that term was not yet coined... they simply called themselves "liberals" believing in "Market Liberalism" or what we now call THE FREE MARKET
actually they wanted to reform what they referred to as "the free market". they wanted companies to stop polluting, to stop using children for labor, to have health and safety codes, to have minimum wages, and to stop monopolizing markets.
those were some "crazy populist" ideas that got us beyond the narrow thinking of libertarianism.
and my point about the land-stealing is that libertarian governments are supposed to protect peoples' property rights, right?
a FREE market and GOVERNMENT are intrinsically at odds with each other.
GOVERNMENT is arbitrary power, uses pure FORCE and coercive tactics to accomplish its generally DESTRUCTIVE goals. whereas unrestricted commerce is determined by the voluntary exchange of all individuals throughout society coordinating there goals towards CONSTRUCTIVE ends.
these goals are coordinated through an array of negative feedback loops and other natural systems of organic & spontaneous order. this system is moral
Not trying to argue the validity of Keynesian theories, but I don't think you understand how our government prints money. The fiat system allows our government to print it from thin air, it needs no physical backing.
Perhaps Keynes deliberately erred in order to play his part in ushering in global government. He was a Fabian Socialist.
"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
- John Maynard Keynes, Economic Consequences of the Peace, 1920, p. 236
Too be fair to the man in 1920 he was anti-inflation. Hayek even said ''I wanted to keep him in power because at the time he was the one who would fight inflation''
Of course Keynes did not mind changing his mind - frequently. He was no means a reliable ally. See video upload 'Hayek on Keynes' for the quote above and more background.
Keynes was generally anti-inflation, with some circumstances where he thought inflation was the least bad solution, but his followers decided that inflation was NEVER a problem.
Keynes was wrong, but he wasn't as nuts as his followers.
The flaw in Idgoopobad's belief that government spending can help the economy is that the government can only take money out of the economy to put back in the economy, whether it be borrowing, taxing or printing of money. It is a zero sum game. Virtually all countries, communist or democratic that embraced Keynes have now recognized that is is a failed concept and have moved to free market. FDR didn't solve the depression, he extended it only to be saved by WW II.
um yeah but the government was doing all the spending, ie. creating/increasing demand, during WWII. This fact, which you explicitly mention, seems to vindicate the idea that government debt-fueled spending can stimulate an economy
This video is very flawed. The best example is when they talk about FDR. They said production rose during world war II what caused that massive government spending on the war effort largely funded by debt. We can keep inflation in check if we spend the money that allows for long term growth like infrastructure work. If there is growth from these projects inflation will be less because there are more goods in the system. Inflation is not caused just by too much money but by to little goods.
May I politely recommend mises (dot) org? Spend a month just reading posts on the site. Might change your mind. I found "Great Myths of the Great Depression" by Lawrence Reed helpful (it's short at 19 pages). FDR's policies prolonged the economic disaster Hoover began.
Inflation is the increase in the money supply. I think it's helpful to promote economic understanding to separate increase in the money supply from a rise in prices.
You are right that an increase in money without an equal increase in goods (who could coordinate this across all goods?) will lead to rising prices.
Think about this - inflation benefits creditors and debtors, deflation benefits savers.
By creditor, I mean the few legally authorized to create money - banks. You and I can't.
this is a gross oversimplification, however, without defending Keynes 'theorem , here just a couple points:
a) the government is supposed to intervein only during a slowdown of the economy to avoid an even worse recession or depression
b) money does -not- have to be taken out of the economy, but could be borrowed from other countries (best example USA), or just printed (again, best example USA), with obvious downsides: inflation and the interconnectivity of today's markets
a) actually keynes advocated saving in expansion and spending more in recession.
b) if the united states borrows from other countries yes, but this ofcurse has to be paid back. if however the government just prints more dollars it simultanously reduces the value of all the other dollars; taking from savers who hold dollars and giving to governement institutions.
I cant believe how wrong you are. how can you say the gov is "supposed to intervein" I guess by "supposed" you mean anti-constitution and anti-logical and anti-growth and anti-economic prosperity. borrowing money from another country is putting money in one pocket from another, you take it away from foreign consumers and producers for domestic consumers and gov, which squanders money. and inflation is taking money out of the economy, lol its not new value, inflation devalues existing money
Well, I suppose one could argue that either choice will not add to productivity in the ecnomomy. But rather reduce each dollars worth and direct value towards the governments choices, thereby redistributing it.
Moreover, the specter of Keynes was raised. I merely tried to clarify Keynes' position.
I am no fan of the FED. In fact, I oppose these BAILOUTS. All the wrong people are getting the money --all of which is winding up in OFFSHORE TAX HAVENS.
Who has access to tax havens --an elite one percent which Bush called :his base'.
Keynes would have favored getting more money into the hands of those who would spend it and thus stimulate the economy with purchases.
No manufacturer will willingly waste monies making a product for which there is NO DEMAND.
Therefore --IT MAKES NO FRICKIN SENSE to provide tax cuts to the business and elite classes. They are NOT GONNA create new jobs and factories UNLESS demand increases.
DEMAND will NOT increase unless the consumer has MORE MONEY TO BUY MORE.
THIS IS FIRST SEMESTER STUFF!
So ---why do people STILL BELIEVE GOP 'SUPPLY SIDE/TRICKLE DOWN' BULLSHIT?
You don't have to go to college to understand common sense. When you hear politicians tell you their plans, you only hear half the story (their half). Heaven forbid they tell it like it is.
A blog I read recently put it best. "How do we invest $30 billion into GM when it is worth $1 billion and not own it?"
Government should be their for theft, injury, and fraud, not doing social experiments that history shown to fail time and time again.
Worth repeating ---NO TAX CUT BENEFITING ONLY THE WEALTHY HAS EVER, AT ANY TIME IN ANY WAY, STIMULATED THE ECONOMY.
If you BELIEVE that it has --then PROVE IT.
Spare me your theories and CITE the frickin'; facts and they are duly record at the Census Bureau, the Bureau of Labor Stats, and the Department of Commerce - Bureau of Economic Analysis.
The only reason why we enjoyed relative economic growth under Clinton's administration was because he did not institute true progressive tax policies. For any of the top tax rates increased, he mitigated the deadweight by slashing cap gains taxes and loosening protectionist policies. But by far, he was able to lower the debt by a huge cut in defense and intelligence spending. Where was the govt. response following WTC in '93 and Yemen in 2000?
No one's arguing about Hoover. He was NOT a conservative. By the way, you should know that the majority of American monies geographically reside out of the US.
The early 80s recession (contrary to your misconception) was a Fed-instigated recession when Paul Volcker decided to spike interest rates past 20% to kill inflation. The Reagan tax cuts had nothing to do with this recession, and in fact helped investors re-stimulate the economy.
"By the way, you should know that the majority of American monies geographically reside out of the US. "
AND SO DOES THE BIG MONEY!
Tax cuts that benefit ONLY the dwindling ELITE always wind up in OFFSHORE TAX HAVENS. That's money REMOVED from circulation, creates NO NEW jobs in the US.
it is a contraction of the money supply and, hence, a recession/depression.
STATS from the Census Bureau, Bureau of Labor Stats, BEA PROVE that job creation declined after each tax cut for the wealthy.
Lennhart, I don't know where you studied economics, or if you did at all, but your information is way off. Where the hell did you get your premise that cuts for top rate earners are outsourced? This is NOT true. Every time we've had truly a progressive tax code, private investment has been stagnant. When Reagan lowered Carter's top tax rate from 70+% to around 30%, the markets rebounded from a period of stagnation.
Go back and read the thread! My INFORMATION is the official stats from CENSUS BUREAU, the Bureau of Labor Statistics, the Department of Commerce - BEA.
Read 'em an weep!
"Every time we've had truly a progressive tax code, private investment has been stagnant. "
Read the OFFICIAL SOURCES. The OPPOSITE has occurred.
Reagan's tax cut was followed by TWO YEARS of recession. It's in the public record.
Dude, the early 80s recession was Fed-driven. Paul Volcker spiked the rate to some 20% in June of '81. Look in ANY source. The timing just happened to align. Reagan's first tax cut didn't even come until the latter half of the year.
And if you check the market indices during Carter's administration when he had a 70% top rate, you'll notice that a bounce didn't happen until Reagan took office and lowered the rate to some 30%.
"I don't know where you studied economics, or if you did at all,"
In fact, I have studied economics, business, accounting and math at a major university.
I also know how to read the OFFICIAL DATA from the Bureau of Labor Stats, BEA, and Census Bureau.
I know the significance of GINI indices that were rising throughout the Reagan/Bush years. If you don't know what a GINI Index is, a clue: a RISING GINI INDEX is BAD NEWS for Reagan-heads.
Tax cuts ---therefore --have NEVER stimulated the economy.
The record is available at the CB, Bureau of Labor Stats, Dept of commerce-BEA. Every GOP tax cut has been followed by a recession/depression.
Anyone who thinks they will get the STRAIGHT talk from a THINK TANK is stupid. THINK TANKS are groups of folk who make money by spinning and inventing PLAUSIBLE sounding propaganda.
If this were the case, all else equal, we'd see a contraction in the money supply. Following the quantity theory, using your logic, we'd be experiencing deflation. This is completely false.
Yes you are right....Because the professor is a bleeding heart Keynesian socialist hell bent on brainwashing all the students into believing in big government spending.
FYI ---economist both left and right KNOW that Keynes was a 'conservative'. It's not the professional economists' fault that Americans have been lied to, kept stupid, and --as a result --anyone NOT to the right of attila the hun is consider ...GASP ...LIBERAL.
@distortion0 More public spending is Bigger Government!
FatTony726 3 months ago
I think its pretty well established that in your typical recession, the Keynesian pump priming doesn't work too well with low multipliers and crowded out investment. In the liquidity trap/balance sheet recession like now and Japan's, the collapse of private investment and spending can be offset with government spending until debt overhang is gone and the private sector take all that liquidty in the system and borrow/invest/spend again.
cordrenkin 5 months ago
No one claims that bigger government improves growth. Keynesians claim sound public spending can improve growth. Strawman.
Distortion0 5 months ago
@Distortion0 The more the government spends the bigger it gets, the only way a government can commence public works of that kind is if it's already large enough to do it in the first place.
s0beit 4 months ago
This has been flagged as spam show
"The stimulus only stimulated Chris Matthews' leg." ---Congress of Racial Equality National Spokesman Niger Innis to Sean Hannity, Aug. 18, 2011
hookalakah 5 months ago
Yes, the world's largest public works project, known as World War II, didn't stimulate the economy.
grampacanuck 6 months ago
@grampacanuck no it did not but new deal policies were stop and people save up. America was the only industrial economy left standing undamaged. this let to boom until developing counties could complete in 1970's
spark300c 5 months ago
Keynesian Economics is an oxymoron
shotsky94 6 months ago
Only the FDR Glass-Steagall principle will separate commercial from speculative banking, thus freeing the nation from obligations to Wall St. and the City of London, and re-establishing a credit system for rebuilding the nation.
H.R. 1489, Return to Prudent Banking Act of 2011, is before the House of Representatives, which aims to revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so called 'Glass-Steagall Act
tepstolog 9 months ago
@tepstolog the repeal of the glass steagall act didn't cause the housing collapse nor the recession... as a matter of fact the glass steagall act actually ties the government even more with wall street by being forced to bail out their depositors under the FDIC contracts... regulations like that along with CRA and other government regulations caused the collapse... that along with the FED setting interest to low... we need to stop regulating the markets since its causing the collapse...
Sexisttroll 7 months ago
Keynes was wrong.
ajsaccount1991 9 months ago
There is one point which the anti-keynesians keep missing. A point which is my favorite point(i came up with it). Even if this keynesian "stimulus" did work(which it doesnt) it still wouldnt help.
Why might you ask? Good question. Look at where youre buying all your goods from. China, Japan, Germany, Canada etc etc. Keynesian hypothesis would only work in a closed system or a system where the people were chosey over local goods!
NicosMind 10 months ago
@N But like the video says. Taking money out of your right pocket and putting it into your left doesnt make you rich. And borrowing the money only to pay an interest on it is even worst!!
And WW2 is the Number Fallacy as i like to call it(like the broken window), By causing massive inflation and counting those numbers like it was real GDP is moronic. Zimbanwe is a success if you use that perspective.
There was massive shortages for everyone in WW2. Food clothing etc. Count products Not numbers
NicosMind 10 months ago
there are output effects have fun being a pawn.
amadeous21 10 months ago
Wait ... economic activity went up and unemployment went down with the advent of WWII? What is a war, especially of the magnitude of WWII? It is a giant example of Keynesian spending - the government went into debt to give consumers money (either as weapons manufacturers or as soldiers) and these in turn bought the (somewhat limited) range of available goods.
If this isn't an example of Keynesian economics getting the economy going again, then what is it?
S201676 1 year ago
Fact is, Keynesianism, if implemented correctly, works, unlike the failed economic policies of the IMF, which have been disastrous wherever implemented (Ireland and Greece are dead). In Argentina, Keynsianism saved the nation from oblivion. The biggest waste of government money is Corporate Welfare. The state should either intervene directly or not at all; no taxpayers money should ever be given to private companies, for that is corporatism. End all Corporate Welfare.
Relugus 1 year ago
Audio and video are out of sync
CuntryDriver 1 year ago
This is no different than the global warming deniers and the "intelligent-design" crowd. False ideas that are peddled to people who want to be lied to. Conservative movements across the World often develop their own mythologies because they cannot stand up to reasoned debate and logic. Dream on
jimboedwardlee 1 year ago
@jimboedwardlee have as a result is tender that has no value thus what you own is of no value. Confidence is how legal tender is accepted. What you are seeing now is a tipping point. One that those of us that know have seen coming for years. Before I was born this was being forewarned. Remember the Federal Reserve has only been around for less than 100 years. When the worlds currency collapses it will be studied as the worst idea in human history. That or we go to global currency. Then p3
SuperGuitarman69 1 year ago
Spending is not an accurate or appropriate measure of the strength of an economy.
Production is a better measure of economic activity and strength. And as all but the most clueless of mullet-wearing morons understands... Government produces nothing.
webfulcrum 1 year ago
Keynes was "fighting for england" his project was to use to govt to subsidise the BRITISH economy in order to make it stronger in the global competition within the tight context of poswar decolonisation, (and also to temporarily boost the standard of living of the working and middle classes in ordre to dissipate socialist tendencies within the population that threatened to take a revolutionnary caracter given the prestige of USSR at the time).
He was working for you boys ! only in a smarter way.
Longlivethe4th 1 year ago
@Longlivethe4th more concretely, the money spent by the govt was supposed to come from the market shares taken to the US, Germany etc, in this GLOBAL context, a keynesian solution is a working solution for an advanced state, albeit a cynical, nationalistic one wich enventually fails, like any other nationalist-capitalist solution.
Longlivethe4th 1 year ago
Well i think Keyens was concentrating on the idea of post war economic development. Where government fulfils need. Where in the UK certainly he was right
SirOneoneselfandone 1 year ago
@SirOneoneselfandone No he was not. Monetary policy only succeeds in inflation under the Keyensian theory. You cannot stimulate an economy based on aggregate demand is unchanged. Only free production can do this. In other words, get out of the individuals way. Do not regulate and tax idealists to death. allow them to try to create prosperity and create jobs leading to MORE aggregate demand. Keyensiam theory came out when? When the world was in crisis. Caused by the US's Federal Reserve
SuperGuitarman69 1 year ago
@SuperGuitarman69 1st I am not going to pretend to understand so I assume you are right, however in the UK after WWII it certainly worked
SirOneoneselfandone 1 year ago
@SuperGuitarman69 You need to study economic history a little better. Conservatives have a mythology that they are peddling that doesn't match up with history. Look at the most Conservative States in our country and look at their economic histories. I rest my case...
jimboedwardlee 1 year ago
@jimboedwardlee My degree is in economics with advanced studies at the Mises institute. The general construct of what politicians are dealing with now is within the guidelines of Keynesian philosophy. We have a central banking system in which causes an unnecessary set of problems. Within the flawed Keynesian system the conservatives being for limited taxation and common sense. History is clear. Look at what happened since the emergency federal reserve act. The history is crystal clear.
SuperGuitarman69 1 year ago
@SuperGuitarman69 Ok - explain to me how a post-modern economy can function without a central bank and give examples of success. What happens to the middle class under your construct - does it shrink or expand?
jimboedwardlee 1 year ago
@jimboedwardlee It functions based on backed currencies. The world used to be in a barter system. Back then everything was worth something. Now that we have a central banking set up all over the globe you have no examples of backed currency hence the fluctuations in values of individual currencies. You simply cannot print money of no value but we we do. In the trillions. Everything you see is fake. You base it on the value of what the dollar is in this country. In regards to the middle class p1
SuperGuitarman69 1 year ago
@jimboedwardlee On your global warming deniers? 8 years ago 81% believed global warming was real. 4 years ago, 56%, 2 years ago 31%. I'm curious to see what those numbers are now. The IPCC has been caught in fraud. The vast majority of scientists either say it is not any alarm at all or does not exist. Some in the field of botany contend it is HELPFUL to the environment. You seem to be a leftist. Truth matters not to the leftist. Only the agenda
SuperGuitarman69 1 year ago
@SuperGuitarman69 I don't care what the public believes about global warming- have you seen the economic and scientific literacy rates of the American public? Are you even aware - LOL! The average American cannot even pass a basic information test on either science or economics. Calling me a leftist is just a name - It means nothing to me. The veracity of your statements are weak. You say that the vast majority of scientist say it doesn't exist or are not alarmed is a lie.
jimboedwardlee 1 year ago
@jimboedwardlee No it is not a lie. At least have the decency of calling them paid off by big oil or something. To say they do not exist is totally false. Those continuing on that path that has been marred is amazing to me. I don't blame you not liking titles. I do not either. I do not consider myself libertarian or conservative. I am a realist. I look for truths
SuperGuitarman69 1 year ago
@jimboedwardlee it is tough to hear this I know,but it is reality. There is actually no such thing as middle class and rich. It is propelled into existence by what is perceived value. This is where I started seeing the problem way back in college. In a macro vision of the economy we can see class. But when you look on the side of the street that is unlit and you have a flashlight it is a much different picture. If money is backed by nothing then what you own is backed by nothing. What we p2
SuperGuitarman69 1 year ago
@jimboedwardlee you will see a depressed economic world. Where you have producing nations and non producing nations "spreading" the wealth around. Everyone living the same and under the control of one large central government. The constitution and all it stands for in the ashes for the "common good". That isn't right it isn't fair and there will be a global revolt. But I've seen the left in action. Seems they want that world!
SuperGuitarman69 1 year ago
Government can divert profit from going into the hands of of people who create all the wealth (goods and services), not to mention the jobs. Socialist/Communist are very popular with people. The productive capacity unrealized, and wealth never created is easy to dismiss. Government doesn't know anything. It's the Robin Hood myth. Private sector rubs two pennies together to create a nickel. Government steals three cents, mis allocates it, consumes it, and borrows against it. And feels great!!!!!
66chevyo 1 year ago
@66chevyo Amen my brother Amen
SuperGuitarman69 1 year ago
@66chevyo Explain why then the worst crashes in ecmonics do not come when government interfere with markets, but rather when governments do not.
Kevashida 1 year ago
@Kevashida I'll reciprocate to your opinion with my own. When you foist your ideas into the world, take the time to explain them. If you state the opinion as you do "the worst crashes in ecmonics do not come when government interfere with markets" as if it were an undisputed fact commanding to be reckoned with in an of itself. I perceive it as another loud and vociferous opinion based on hearsay. Did you subject this theory to critical examination? Did you discover any opposing theories?
66chevyo 1 year ago
@66chevyo Okay, Let's not go to the two largest crashes in the US.Yes, recovery took years in 29 and it is not clear if or when we will recover today. But let me ask you this, would not collecting taxes fit into your idea of a hands off government? Would that make the best economic model?
Kevashida 1 year ago
@Kevashida The panic of 1819 was America's first great economic crisis. The government did not interfere, the price mechanism redistributed resources where they were needed. The economy restructured and began growing after one year. The panic was as severe if not more so than the "great depression" of 1929. When the State assumes increased control over Society's resources, the resources are mis allocated. Only supply and demand, through the price mechanism can determine value with accurately.
66chevyo 1 year ago
@Kevashida The state should spend what it collects in taxes. A national sales tax could easily right the imbalance in Federal taxes/expenditures. Productive investment would labor unmolested, and people would feel incentive to under-consume. This underconsumption would increase savings and productivity. The current problems were produced by Socialism. A central bank with State power. A state which pretends to "provide" with force instead of protecting with force. The U.S. needs Capitalism.
66chevyo 1 year ago
this man is utterly destitute of any intellectual rigor whatsoever!!! sure, keynesianism has inherent weaknesses, but that chart he showed was just plain stupidy. i bet this guy hasn't actaully read the general theory of employment, money and interest.
kkmarivate 1 year ago
No Government has money it hasn't Stolen from its citizens!
RecceMan90 1 year ago
You would think they would learn.
bertly71 1 year ago
i meant he did not have the metrics we had today. he actually used to compile a lot of his own data according to skidelski's book citing letters and correspondence of the time.
vcedre1 1 year ago
Firstly the Great Depression was a disaster not least because monetary policy was not co-ordinated with fiscal policy. Secondly, just because Roosevelt's New Deals didn't save the economy it did mitigate some of the effects. Imagine 1930s America without any stimulus at all?
Thirdly, the analogy with Japan is ridiculous. The Japanese economy only keeps going with the demand management being operated by their government. Without this the savings glut would cause a catastrophic recession in Japan
MrPlender 1 year ago
@MrPlender FDR's New Deal made the situation worse.
PissedFechtmeister 1 year ago
Keynesianism suggests ''counter cyclical'' policies i.e. during a boom fiscal policy should be contractionary, and during a recession fiscal policy should be expansionary. Expansinary policies being 1)increase in government spending 2)decrease in taxes. Contractionary policies being 1)decrease in governement spending 2)increase in taxes. Keynesians see Herbert Hoover's June 1932 TAX INCREASE as making the Depression WORSE. This video is misleading and not telling the facts. *Thumbs down*
graw81 1 year ago
@graw81 The true success of Keynesian policy can be seen at the onset of World War II, which provided a kick to the world economy, removed uncertainty, and forced the rebuilding of destroyed capital. Keynesian ideas became almost official in social-democratic Europe after the war and in the U.S. in the 1960s.
graw81 1 year ago
@graw81 Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is policies which acted against the tide of the business cycle: deficit spending when a nation's economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays.
graw81 1 year ago
@graw81 Deficit spending is not Keynesianism. Importantly, and as I have already mentioned - Keynesianism recommends counter-cyclical policies to smooth out fluctuations in the business cycle!
graw81 1 year ago
This is such a crude and childish "explanation" of Keynesianism, its good evidence that no one at CATO has even read or seriously investigated the General Theory of Employment, Interest, and Money that they claim to be debunking here. There is nothing in Keynesianism that says taxes should be raised in a recession, or that tariffs are good, this is just a cheap re-hash of the famous "Treasury View" with some incorrect information.
hoodoo961 1 year ago
@hoodoo961 AGREED!! And lets just point out some dates while we are here...Hoover 1932, Keynes's General Theory 1936.
graw81 1 year ago
One word: "externalities"
AsianCynicist 1 year ago
This is such an utterly false representation of what Keynesianism is. Keynes never advocated tax increases in a recession, never advocated tariffs. And spending by Roosevelt in the New Deal actually did reduce unemployment until he cut spending in 1937. And then, he says WWII ended the Depression, but fails to mention the reason: because the government started spending even more money paying people to build all the war goods and hardware.
hoodoo961 1 year ago
There is a major fallacy in this man's argument against keynesianism. The one that was fairly obvious to me was the tax rates. Keynesianism did not advocate for higher taxes during a recession, it advocated for lower taxes during a recession.
clevebrowns3 1 year ago
@clevebrowns3
I'm a moderate Keynesian but Hayak did not advocate higher taxes he advocated to do nothing to them. Send me the link or a citation that you are referring to. I've never read his primary work, only read his theories in text books and you know how textbooks can be. But I would love if you would show me, that would be cool and a silver bullet in H it were true.
vcedre1 1 year ago
@vcedre1 When did I say that Hayek advocated for high tax rates? I'm sure I never said that and if I did, it was probably a mistake.
clevebrowns3 1 year ago
this is a great video
Thetruthishere11 1 year ago
this video is fucking ridiculous!
pdaniels9000 2 years ago
and the United States in the 19th century. There has never been a TRUELY 100% libertarian society, but those that were closest are currently the worlds leading economic superpowers--effectively raising the standard of living of millions of destitute people.
What have progressive liberal policies ever done? The Answer? Nothing. In fact I'd say they were regressive.
lyethian 1 year ago
so social security, medicare, civil rights, health and safety codes, education reform, and minimum wage are all regressive?
pdaniels9000 1 year ago
Other than civil rights, yes. Those are all typical examples of well-intentioned policies that have a myriad of unintended consequences and terrible results.
lyethian 1 year ago
how are any of those regressive?!?!?!
pdaniels9000 1 year ago
@pdaniels9000 yes and continue to be a drain on the econamy and individuallity. case and point; my father is 88 years old peid into social security all of his life. recieves a check for it in the sum of 623.00 every month hardly enough to live on' however if my father would have keopt that monet and invested it in intrest bearing accounts he would be a multi millionaire. all of fdr's policies have failed
SuperGuitarman69 1 year ago
id hardly say that ALL of his policies have failed. id say that many of his policies were successful, it's just that over time we have neglected them and therefore have labeled them as unsuccessful.
ooooo...so you want private social security? well think about if you had invested your grandpa's checks into the financial markets in 2008? where would that have gotten him?
pdaniels9000 1 year ago 2
@pdaniels9000 precisely my point. The founders intended on individual choice not for government to turn to a nanny state. That's the fundemental flaw in all of those programs. As milton friedman said noone spends money more carefully than the individual does. Government ruined those programs through years of abuse. Proving my point and his.
SuperGuitarman69 1 year ago
let's look at the safety nets they have in Western European countries. they have functioning social security systems, national health insurance, better education, etc. maybe it's the attitude of conservatives in our government which ruined those programs.
*and if people spend money carefully as individuals then how do you explain CEOs spending billions of taxpayer dollars on corporate planes? how do you explain Americans consuming mass quantities of food and clothing that they don't need?!?!
pdaniels9000 1 year ago
@pdaniels9000 Are you an American? If you believe that Western European socialism provides better anything than America? Youre out of your mind. Conservatives didn't ruin those programs. Government did. Plus those programs were wrong when FDR implemented them and kept us in the recession ultimately to the depression. The constitution warns us of govenment interference. It is NONE of your buisness or mine or the government how any CEO or company spends their money.
SuperGuitarman69 1 year ago
@SuperGuitarman69 where in the constitution does it warn us of government interference? I'd really like to see an actually clause which says that.
Secondly, that attitude is exactly what got us into this financial crisis in the first place. Maybe if we kept tabs on how CEOs were spending money, we wouldn't have let the financial industry gamble our savings away.
pdaniels9000 1 year ago
@pdaniels9000 If you are a stockholder an investor or own the company then you have a right to question what is in your companies best intrest in how it should best spend their money.On planes CEO bonuses etc.. It is none of YOUR business if you don't. SHUT UP. Now youre going to pull GM or AIG out and say thats tax payer money i do own it. We never should have bailed them out in the first place. Quit watching MSNBC and CNN and Micheal Moorer. Sit and think for yourself
SuperGuitarman69 1 year ago
@SuperGuitarman69 i don't watch cable news FYI, but I'm guessing you watch Fox?
I don't think we should have bailed out AIG and GM, because I don't think you should reward failure. I do think that we should have used a few billion dollars of spending and employment programs (instead of $700 billion) to bail out the shareholders and working class people who were unknowingly affected by the financial crisis though. I call it "trickle-up" economics and we should try it for once.
pdaniels9000 1 year ago
@pdaniels9000 Trickle up? That means the government has to hand out money. How can they do that? They don't have any. You can only prosper if you have new and expanding business. Lower taxes on individuals and business and instill incentives to open and compete in the market. That creates private sector jobs and gets government out of the pockets of business and individuals. You have freedom and REAL money. Government poor, the people wealthy. Reagan did it and it was 2% unemployment. GROWTH
SuperGuitarman69 1 year ago
government takes resources from unproductive industries and redistributes (you probably hate that word) it to more productive industries. tax cuts do help stimulate the economy, but so does government spending.
if we gave money to the people affected by the financial meltdown then the economy could avoid an even further decline and could revitalize financial markets (assets could be liquidated).
FYI government and people are interrelated. stop thinking they are separate entities.
pdaniels9000 1 year ago
@pdaniels9000 Under Reagan was the biggest expansion in recent American history. 2% unemployment. No stimulous does not work because it isn't REAL money. It's borrowed money being flushed into the economy. Bush tried it failed. Carter really tried it. REALLY FAILED. Reagan cut spending and taxes it boomed the private sector. Government has no money. If you print it it causes inflation. There is no arguing with me. History prooved it. Homeless? The homeless are by choice buddy
SuperGuitarman69 1 year ago
@SuperGuitarman69 o yeah, I'm sure the homeless just love not having homes. bottomline, the poverty level was higher under Reagan.
if you really think stimulus doesn't work then I know for a fact that you haven't taken a college level economics course.
but more importantly, do you know that the Fed can take money out of the economy just like it can put it into the economy? the gov't is actually profiting off of the bailout because companies are paying interest on the loans they got.
pdaniels9000 1 year ago
@pdaniels9000 Have a degree in economics. And perhaps you do not understand Keynesian economic theory? You do not. It's a political left bs move to do stimulous. It never works. Bush did it and it failed. It's not real money and you have a video right here that is explaining that to you
SuperGuitarman69 1 year ago
@SuperGuitarman69 the video is bullshit. the point of Keynesian economics is to put money from unproductive sources into productive sources. are you telling me that society is better off if billionaires hide all of their money in a vault? maybe its better that some of that money is used to support the economy.
pdaniels9000 1 year ago
@pdaniels9000 People who are rich are smart with their money. When they are being taxed to the point that makes their primary decisions. ie. when where how and what country to invest in, they will shy away from promoting growth by expanding or opening new businesses. Which stiffles growth and JOBS. The Dems love this. If unemployment is up, they have their poor in check. It's much easier to get people to sympathize and say government programs are the answer Part 1
SuperGuitarman69 1 year ago
@pdaniels9000 To redistribute money. Like this video says. Growth comes in the PRIVATE SECTOR. When you have new investment due to low taxes and tax incentives the rich and business expand and grow and jobs are created. REAL money has value again. Look, you cannot argue this. This isn't a Democrat strength. When it comes to fiscal politics economically they are 180 degrees in the WRONG direction. Please stop debating now and stick to banning salt.
SuperGuitarman69 1 year ago
@SuperGuitarman69 well think about how much growth resulted from the international highway programs. those were government programs. besides, growth and GDP aren't accurate ways of measuring a nation's prosperity.
and if you really think we need tax cuts, look at what happened with george bush. he implemented one of the largest tax cuts in history and all it did was increase income inequality and the deficit.
pdaniels9000 1 year ago
@pdaniels9000 Bush didn't cut taxes, he gave out "stimulus" checks. All that did was cost the government more money.
PissedFechtmeister 1 year ago
@PissedFechtmeister Isn't that the same - a tax rebate is the same as not taking it in the first placce. IE: a tax cut.
MetalDetroit 1 year ago
@pdaniels9000 Also, what good does it do to cut taxes if you're also going to increase spending. That's just reckless.
PissedFechtmeister 1 year ago
@SuperGuitarman69 and FYI you're a partisan douchebag. how about you think about economics with an open mind instead of trying to use it to justify your bullshit political ideologies.
pdaniels9000 1 year ago
@pdaniels9000 The jobs that are out there right now are 70% government and 30% private sector. Now let me explain some basic economic theory to you. The private sector has to pay for those jobs. Now how is it that 30% of the people are going to pay for 70%? You cut spending and lower taxes so that private sector jobs are created. God how can the left be that mathematically challenged?
SuperGuitarman69 1 year ago
@SuperGuitarman69 where from your ass did you pull that statistic out of?
pdaniels9000 1 year ago
@pdaniels9000 Bureau of labor and statistics. You have to think of all government employees local state and federal. Anyone getting a government check. It actually may be higher now
SuperGuitarman69 1 year ago
@SuperGuitarman69 Uh, fact check, Reagan did NOT cut Federal spending, he RAISED IT. Just because he TALKED about a smaller government does not mean he did not actually INCREASE Federal employment and expenditure, growing the government and national debt to new levels. Just saying.
hoodoo961 1 year ago
@hoodoo961 No he just raised defense spending. Remember we were in a cold war at the time. That idiot Carter let our country go into the toilet. Um just like Obama is doing now. Anyhoo, His total spending even with defense wasn't even half as much as Carters spending on welfare, government farmer bailouts etc... get the facts straight!
SuperGuitarman69 1 year ago
@SuperGuitarman69 Oh I'm sorry I did not realize that Federal defense spending did not qualify as Federal spending. Funny how that works. And no, you can check the data, as I have, Reagan RAISED Federal spending to levels above that of Carter. Again, these are just the facts.
hoodoo961 1 year ago
@hoodoo961 Reagan did NOT raise federal spending. The President does not spend the money. Congress Does. Reagan had a Democrat Congress led by Tip O'Neil who promised Reagan spending cuts to coinside with tax cuts - but they spent ever penny of increased revenue.
MetalDetroit 1 year ago
@MetalDetroit Not true. Do yourself a favor and look up Federal defense expenditures from 1970-1980. Hell, just look up Federal expenditure. Its spikes in the 1980s. You want to blame Democrats for that? Democrats controlled Congress for decades, yet the spending spike started in 1980? You're fooling yourself. It was Reagan's budget busting defense spending.
hoodoo961 1 year ago
@hoodoo961 During the 70's the U.S. did nothing to rebuild the military after the Vietnam war. Carter lett he military fall to pieces. It is the responsibility of the President and the Congress to ensure an adequate defense. If you are unable to understand that, that is your problem. Congress increased spending on everything after the revenues skyrocketed after the Reagan tax cuts.
MetalDetroit 1 year ago
@MetalDetroit I am glad you agree with me that defense spending increased, and I accept your tacit apology for saying Reagan cut spending.
hoodoo961 1 year ago
@hoodoo961 I apologize for nothing - I didn't say Reagan cut spending. Reading Comprehension is not your strong suite.
Congress spends money - not the President.
MetalDetroit 1 year ago
@pdaniels9000 pART 2 See, Bush Sr. lost in a fluke to Clinton thanks to Ross Perot. Clinton started out hard left. Dick Morris (his top advisor at the time) told him if he were to hold onto a 2nd term, after the Republicans took over congress mid way through his 1st term, he would have to sign the contract with America. Cut spending. Reluctantly he did this and sat on his hands. Tech boom helped him. Bush Jr. abandoned conservative principles and became a Dem. Housing boom and wham were (cont)
SuperGuitarman69 1 year ago
@pdaniels9000 wham were in a recession. He bailout banks and auto manufacturers. He allowed that moron Frank and Dodd to push him into the housing bill and we crumbled. All 2nd bill of rights bullshit. He was a DEMOCRAT! No Conservative was for him. So if we go back to the Reagan years you will never ever see another arguement for Dem's to be in office. Libertarians yes. They tend to be more on the side of social liberty and are good for America. Democratic party? No they need to go away.FOREVER
SuperGuitarman69 1 year ago
@SuperGuitarman69 under Reagan we had higher rates of homelessness and we had rises in crime and drug-related arrests. he was absolutely apathetic to Civil Rights issues and AIDS. he overfunded the military and he increased the gap between the rich and poor with his "Reaganomics" by raising taxes on the middle class and reducing them on the rich. these are arguments for why dems should be in office, because they're not brainwashed by meaningless ideologies like conservatives and libertarians.
pdaniels9000 1 year ago
@SuperGuitarman69 and by the way. you can't just label george bush a non-conservative because it suits your political agenda. the fact is that he was elected (actually he stole the election) as a conservative politician by conservatives. this is how conservatives function in our system. they over reward their rich friends, they ignore national disasters, they screw the middle class, they balloon up defense spending, and they cause financial disasters.
pdaniels9000 1 year ago
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@pdaniels9000 wham were in a recession. He bailout banks and auto manufacturers. He allowed that moron Frank and Dodd to push him into the housing bill and we crumbled. All 2nd bill of rights bullshit. He was a DEMOCRAT! No Conservative was for him. So if we go back to the Reagan years you will never ever see another arguement for Dem's to be in office. Libertarians yes. They tend to be more on the side of social liberty and are good for America. Democratic party? No they need to go away.FOREVER
SuperGuitarman69 1 year ago
@pdaniels9000 lmao "grampa's money," well said. I think
what Keynes's theories lacked was a product of not having the access to numbers we have today. He was a Pragmatist who was willing to change his mind. The conclusions of his Treatise on Money was very different then those in the General Theory. But think, who came up with the idea that confidence has an effect in the economy, confounded the multiplier effect, put to bed this bullshit that there is no such thing as involuntary unemployment.
vcedre1 1 year ago
@vcedre1 I'm having trouble figuring out what you're trying to say. lol.
pdaniels9000 1 year ago
These people clearly do not understand basic economics. The government can expand the money supply, which can combat economic contractions caused by lending crunches. In general, the video goes something like this: "Let me oversimplify and blatantly misrepresent this theory. Now look at this one graph! Strawman sucessfully destroyed."
Thucydides411 2 years ago
and then your monopoly money is worthless.
BrettDunbar 2 years ago
The government can only get money through borrowing, or taxation. It has nothing to produce. This money is either take out of the economy or needs to be payed back, at interest.
Yes there is a boom and bust cycle, but the boom is the problem, that causes the bust. Prices get higher then the market adjusts. When has stimulus worked in the past?
asleeperj 2 years ago
@asleeperj The government doesn't only get money through borrowing and taxation - there are other methods. The most blatant of these methods is printing money, which is then usually used to buy back its own treasuries from investors, but it can also decrease the fractional reserve rate required of banks. But more importantly, government is more creditworthy than private individuals, so it can borrow to stimulate the economy. During bust years, the gov't runs a debt, during boom years, a surplus.
Thucydides411 11 months ago
First of all, thanks for the video. As a first-year Economics student in the netherlands, this is obviously an interesting and important subject for me to comprehend. However, i think you made a mistake somewhere (i could be very wrong as i'm new to this whole keynesian theory so be light on me).
Aren't you forgetting to take the multiplier effect into account? (as you said that taking money from the economy and putting it back in won't make any substantial difference)
patatmetkip 2 years ago
@patatmetkip The whole point is that the multiplier effect cuts both ways. Reduced business investment multiplies the damage by the same factor as any spending could by the government. The only way stimulus can possibly work is if the government borrows money to spend on capital that private industry refuses to purchase. That is, the money is available for lending, but people won't borrow at any interest rate that covers the cost of lending.
ajpmathwiz 1 year ago
Great video! If we keep going the way we're going with "big gov.'t, then our great country will no doubt falter, and who knows how far we will fall?! I hope we come back to our senses soon.
DexterRufus 2 years ago 2
I am so tired of leftist keynesians and even conservative keynesians which includes supply siders. Austrian economics is the future. they have the track record that make keynesians blush. Viva Market liberalism!
trekkerperson 2 years ago 2
Can you give me one example of a mathematical model which supports Austrian Economics? You probably can't because it is a purely political school of thought filled with unjustified pre-conceived notions.
Keynesian economics is not a movement that has to be forced through political means. It's just a basic theory of economics which can be used to maximize an economy's productivity.
pdaniels9000 2 years ago
If there logical arguments are not getting through; than perhaps you can at least acknowledge that it was the Austrians who predicted our current state of affairs as far back as 2002. Your Mathematical models a joke
C+I+G=Y Keynsians off the bat have a BROKEN MODEL
Why?
BECAUSE THEY FAIL TO REALIZE THAT THERE IS A TRADE OFF IN THE ECONOMY BETWEEN "C" and "I" they cant be lumped together!!! furthermore they never got a chance to dIs-aggregate "C" they never got the whole TIME PREFERENCE thing
joeymackaroni 2 years ago
Keynesian=clumsy agrigations with no bearing on reality
Austrians= Finesse
The only reason Keynesians dominated the 20th Century was mostly due to the vital role they bestowed on GOVERNMENT. Giving politicians cover to run roughshod over the economy.
Keynsians---Recession is to be resisted
Austrians----Recession is the cure for all the imbalances that occurred during reckless inflationary boom
Results:
Keynsian--- MORE OF THE SAME
Austrian------Kick the ignorant keysian mis-managers out !
joeymackaroni 2 years ago 2
This is simple and well put my friend.
asleeperj 2 years ago
Can you give me 1 example of a Keynesian model that actually WORKED to predict this mess that THEY gave us?
What good is an "economist" if they don't have a working understanding of the economy? If we weren't in such desperate times I'd laugh at these clowns. Rather I fear for what they're planing to cram down our throats next. Who knows what their next desperate experiment is in the works? I'm certain though, when the dust settles, no one will association with the 100 yr experiment of Keynes
joeymackaroni 2 years ago
It cannot work. it makes no sense. I dont care how many C+I+G=Y's you through out. It takes the human out of the picture. Humans don't make rational decisions. furthermore, it is in fact, and in practice a broken theory to begin with.
Hayek owns. always has always will. Because it makes sense.
asleeperj 2 years ago
can you name me one truly libertarian society that has been successful?
pdaniels9000 2 years ago
Yeah the united states. the fastest growing economy when the federal government had little involved in the affairs of the market place. Other than that, there have been no others.
asleeperj 2 years ago 2
what time period???
pdaniels9000 2 years ago
AMERICA .....until 1913
END THE FED
joeymackaroni 1 year ago
Let's see we financed our Revolution with paper currency. From the foundation to 1865 we had slavery. We stole mass quantities of land from Native Americans and Mexicans. Women, non-whites, and religious minorities were denied basic rights until the 20th century. We had no gaurantee of clean air or drinking water until the 1910s. And yet we were libertarians all that time???
pdaniels9000 1 year ago
most of the problems that you address here were the consequence of some form of GOVERNMENT action. for instance "WE" did not confiscate any native lands, the GOV did. Furthermore the American society, up until the "progressive" takeover and transformation of the Democratic Party, generally ascribed to "libertarian" principals. Although that term was not yet coined... they simply called themselves "liberals" believing in "Market Liberalism" or what we now call THE FREE MARKET
joeymackaroni 1 year ago
actually they wanted to reform what they referred to as "the free market". they wanted companies to stop polluting, to stop using children for labor, to have health and safety codes, to have minimum wages, and to stop monopolizing markets.
those were some "crazy populist" ideas that got us beyond the narrow thinking of libertarianism.
and my point about the land-stealing is that libertarian governments are supposed to protect peoples' property rights, right?
pdaniels9000 1 year ago
by the way, this was a cute way to let out your emotions. X)
pdaniels9000 1 year ago
a FREE market and GOVERNMENT are intrinsically at odds with each other.
GOVERNMENT is arbitrary power, uses pure FORCE and coercive tactics to accomplish its generally DESTRUCTIVE goals. whereas unrestricted commerce is determined by the voluntary exchange of all individuals throughout society coordinating there goals towards CONSTRUCTIVE ends.
these goals are coordinated through an array of negative feedback loops and other natural systems of organic & spontaneous order. this system is moral
joeymackaroni 1 year ago
Hong Kong.
lyethian 1 year ago
Not trying to argue the validity of Keynesian theories, but I don't think you understand how our government prints money. The fiat system allows our government to print it from thin air, it needs no physical backing.
trehansen 2 years ago
We don't "back" our money with gold anymore because we've found alternative means of supporting our dollars that actually have intrinsic value.
By our government investing tax dollars in things that allow the economy to increase output of wealth, it keeps our dollar sustainable.
The backing is our success at maintaining balanced and equal trade.
pdaniels9000 2 years ago
"success"
curryman4life 2 years ago
This comment has received too many negative votes show
Keynes would be printing money right now so shut up. Mises was disproved as a cult religion a LONG time ago.
mitchrix31 2 years ago
You dont know what you are talking about. Mises economics have finally started to get recognized because they have been proven to be correct.
parkerp11 2 years ago 15
Perhaps Keynes deliberately erred in order to play his part in ushering in global government. He was a Fabian Socialist.
"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
- John Maynard Keynes, Economic Consequences of the Peace, 1920, p. 236
BmoreAmerican 2 years ago 5
Too be fair to the man in 1920 he was anti-inflation. Hayek even said ''I wanted to keep him in power because at the time he was the one who would fight inflation''
Of course Keynes did not mind changing his mind - frequently. He was no means a reliable ally. See video upload 'Hayek on Keynes' for the quote above and more background.
Malthus0 2 years ago
Keynes was generally anti-inflation, with some circumstances where he thought inflation was the least bad solution, but his followers decided that inflation was NEVER a problem.
Keynes was wrong, but he wasn't as nuts as his followers.
Myndir 2 years ago 2
...that's some deep shit, man.
Tr0tim 2 years ago
The flaw in Idgoopobad's belief that government spending can help the economy is that the government can only take money out of the economy to put back in the economy, whether it be borrowing, taxing or printing of money. It is a zero sum game. Virtually all countries, communist or democratic that embraced Keynes have now recognized that is is a failed concept and have moved to free market. FDR didn't solve the depression, he extended it only to be saved by WW II.
tch2fish2 2 years ago 4
um yeah but the government was doing all the spending, ie. creating/increasing demand, during WWII. This fact, which you explicitly mention, seems to vindicate the idea that government debt-fueled spending can stimulate an economy
floating00eye 2 years ago
This video is very flawed. The best example is when they talk about FDR. They said production rose during world war II what caused that massive government spending on the war effort largely funded by debt. We can keep inflation in check if we spend the money that allows for long term growth like infrastructure work. If there is growth from these projects inflation will be less because there are more goods in the system. Inflation is not caused just by too much money but by to little goods.
ldgoodpobad 2 years ago
May I politely recommend mises (dot) org? Spend a month just reading posts on the site. Might change your mind. I found "Great Myths of the Great Depression" by Lawrence Reed helpful (it's short at 19 pages). FDR's policies prolonged the economic disaster Hoover began.
order9066 2 years ago 4
Inflation is the increase in the money supply. I think it's helpful to promote economic understanding to separate increase in the money supply from a rise in prices.
You are right that an increase in money without an equal increase in goods (who could coordinate this across all goods?) will lead to rising prices.
Think about this - inflation benefits creditors and debtors, deflation benefits savers.
By creditor, I mean the few legally authorized to create money - banks. You and I can't.
stevemcgee99 2 years ago 2
this is a gross oversimplification, however, without defending Keynes 'theorem , here just a couple points:
a) the government is supposed to intervein only during a slowdown of the economy to avoid an even worse recession or depression
b) money does -not- have to be taken out of the economy, but could be borrowed from other countries (best example USA), or just printed (again, best example USA), with obvious downsides: inflation and the interconnectivity of today's markets
teamkilla 2 years ago
a) actually keynes advocated saving in expansion and spending more in recession.
b) if the united states borrows from other countries yes, but this ofcurse has to be paid back. if however the government just prints more dollars it simultanously reduces the value of all the other dollars; taking from savers who hold dollars and giving to governement institutions.
Sondre7 2 years ago
I cant believe how wrong you are. how can you say the gov is "supposed to intervein" I guess by "supposed" you mean anti-constitution and anti-logical and anti-growth and anti-economic prosperity. borrowing money from another country is putting money in one pocket from another, you take it away from foreign consumers and producers for domestic consumers and gov, which squanders money. and inflation is taking money out of the economy, lol its not new value, inflation devalues existing money
slickbtk 2 years ago
Well, I suppose one could argue that either choice will not add to productivity in the ecnomomy. But rather reduce each dollars worth and direct value towards the governments choices, thereby redistributing it.
Sondre7 2 years ago
Moreover, the specter of Keynes was raised. I merely tried to clarify Keynes' position.
I am no fan of the FED. In fact, I oppose these BAILOUTS. All the wrong people are getting the money --all of which is winding up in OFFSHORE TAX HAVENS.
Who has access to tax havens --an elite one percent which Bush called :his base'.
Keynes would have favored getting more money into the hands of those who would spend it and thus stimulate the economy with purchases.
lennhart 2 years ago 2
Lesson from ECONOMICS 101: SUPPLY AND DEMAND.
No manufacturer will willingly waste monies making a product for which there is NO DEMAND.
Therefore --IT MAKES NO FRICKIN SENSE to provide tax cuts to the business and elite classes. They are NOT GONNA create new jobs and factories UNLESS demand increases.
DEMAND will NOT increase unless the consumer has MORE MONEY TO BUY MORE.
THIS IS FIRST SEMESTER STUFF!
So ---why do people STILL BELIEVE GOP 'SUPPLY SIDE/TRICKLE DOWN' BULLSHIT?
lennhart 2 years ago 2
Keynes believed that money in the hands of those who would ACTUALLY spend it would --in fact --stimulate an economy.
People spend their paychecks on food, clothes, cars and other shit. If they didn't BUSINESS would go out of business fast.
Keynes believed an economic stimulus should put the money directly into the hands of those who WOULD SPEND IT.
Instead --the right wing bails out ELITES who have put the monies in OFFSHORE TAX HAVENS where it is LOST to our economy.
lennhart 2 years ago
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You don't have to go to college to understand common sense. When you hear politicians tell you their plans, you only hear half the story (their half). Heaven forbid they tell it like it is.
A blog I read recently put it best. "How do we invest $30 billion into GM when it is worth $1 billion and not own it?"
Government should be their for theft, injury, and fraud, not doing social experiments that history shown to fail time and time again.
MRLarkin 2 years ago
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MRLarkin 2 years ago
Worth repeating ---NO TAX CUT BENEFITING ONLY THE WEALTHY HAS EVER, AT ANY TIME IN ANY WAY, STIMULATED THE ECONOMY.
If you BELIEVE that it has --then PROVE IT.
Spare me your theories and CITE the frickin'; facts and they are duly record at the Census Bureau, the Bureau of Labor Stats, and the Department of Commerce - Bureau of Economic Analysis.
lennhart 2 years ago 2
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The only reason why we enjoyed relative economic growth under Clinton's administration was because he did not institute true progressive tax policies. For any of the top tax rates increased, he mitigated the deadweight by slashing cap gains taxes and loosening protectionist policies. But by far, he was able to lower the debt by a huge cut in defense and intelligence spending. Where was the govt. response following WTC in '93 and Yemen in 2000?
sherwelthlangley 2 years ago
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No one's arguing about Hoover. He was NOT a conservative. By the way, you should know that the majority of American monies geographically reside out of the US.
The early 80s recession (contrary to your misconception) was a Fed-instigated recession when Paul Volcker decided to spike interest rates past 20% to kill inflation. The Reagan tax cuts had nothing to do with this recession, and in fact helped investors re-stimulate the economy.
sherwelthlangley 2 years ago
"By the way, you should know that the majority of American monies geographically reside out of the US. "
AND SO DOES THE BIG MONEY!
Tax cuts that benefit ONLY the dwindling ELITE always wind up in OFFSHORE TAX HAVENS. That's money REMOVED from circulation, creates NO NEW jobs in the US.
it is a contraction of the money supply and, hence, a recession/depression.
STATS from the Census Bureau, Bureau of Labor Stats, BEA PROVE that job creation declined after each tax cut for the wealthy.
lennhart 2 years ago 3
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Lennhart, I don't know where you studied economics, or if you did at all, but your information is way off. Where the hell did you get your premise that cuts for top rate earners are outsourced? This is NOT true. Every time we've had truly a progressive tax code, private investment has been stagnant. When Reagan lowered Carter's top tax rate from 70+% to around 30%, the markets rebounded from a period of stagnation.
sherwelthlangley 2 years ago
Go back and read the thread! My INFORMATION is the official stats from CENSUS BUREAU, the Bureau of Labor Statistics, the Department of Commerce - BEA.
Read 'em an weep!
"Every time we've had truly a progressive tax code, private investment has been stagnant. "
Read the OFFICIAL SOURCES. The OPPOSITE has occurred.
Reagan's tax cut was followed by TWO YEARS of recession. It's in the public record.
lennhart 2 years ago 2
Dude, the early 80s recession was Fed-driven. Paul Volcker spiked the rate to some 20% in June of '81. Look in ANY source. The timing just happened to align. Reagan's first tax cut didn't even come until the latter half of the year.
And if you check the market indices during Carter's administration when he had a 70% top rate, you'll notice that a bounce didn't happen until Reagan took office and lowered the rate to some 30%.
sherwelthlangley 2 years ago
Dude, EVERY GOP tax cut winds up in OFFSHORE TAX HAVENS.
That means the money supply contracts. The other word for CONTRACT is DEPRESSION.
Secondly, CARTER ranks SECOND among the top five PREZs in over all GDP and JOB CREATION. In a list of prez, GOPPS pulled up the rear.
The TOP FIVE are all DEMOCRATS.
Those are the official rankings which you can confirm at the Bureau of Labor Stats and the US Dept of Commerce - BEA.
lennhart 2 years ago
"I don't know where you studied economics, or if you did at all,"
In fact, I have studied economics, business, accounting and math at a major university.
I also know how to read the OFFICIAL DATA from the Bureau of Labor Stats, BEA, and Census Bureau.
I know the significance of GINI indices that were rising throughout the Reagan/Bush years. If you don't know what a GINI Index is, a clue: a RISING GINI INDEX is BAD NEWS for Reagan-heads.
lennhart 2 years ago 2
dated: 02.26.09 They'll keep the money, ask for more or file bankruptcy. It will all end in court. Taxpayers must speakout!
ferdie928 2 years ago
Tax cuts ---therefore --have NEVER stimulated the economy.
The record is available at the CB, Bureau of Labor Stats, Dept of commerce-BEA. Every GOP tax cut has been followed by a recession/depression.
Anyone who thinks they will get the STRAIGHT talk from a THINK TANK is stupid. THINK TANKS are groups of folk who make money by spinning and inventing PLAUSIBLE sounding propaganda.
lennhart 2 years ago
"Besides the wealthy always learn where to put their money in order to protect it from taxation. "
Every GOP tax cut which benefits ONLY the INCREASINGLY TINY elite winds up in offshore tax havens.
That's money TAKEN OUT OF CIRCULATION.
It is --in fact --a CONTRACTION of the economy. The other word for CONTRACTION is DEPRESSION.
And there has been one following every GOP tax cut for the rich.
lennhart 2 years ago
If this were the case, all else equal, we'd see a contraction in the money supply. Following the quantity theory, using your logic, we'd be experiencing deflation. This is completely false.
Ooftyman 2 years ago
I think that if I hear another right winger try to SPIN Hoover's GREAT DEPRESSION, I will puke.
Give it up for crisssakes.
This stupid video would not pass a first semester college economics class.
lennhart 2 years ago
Hoover and FDR followed many of the same policies, bub. BOTH were recipes for failure.
Ooftyman 2 years ago
Yes you are right....Because the professor is a bleeding heart Keynesian socialist hell bent on brainwashing all the students into believing in big government spending.
spanishwhiskey 2 years ago
FYI ---economist both left and right KNOW that Keynes was a 'conservative'. It's not the professional economists' fault that Americans have been lied to, kept stupid, and --as a result --anyone NOT to the right of attila the hun is consider ...GASP ...LIBERAL.
Inform yourself and avoid embarassingly yourself.
lennhart 2 years ago