Krugman just regurgitates some statistics. That's apparently all Keynesian economists are capable of doing, because they don't have any fundamental understanding of anything really.
Look towards the Austrian school of economics for REAL UNDERSTANDING.
WHY would you cut taxes for ALL income classes, and HOW would the poor benefit from the rich in the country paying no taxes i.e. no social welfare. In THAT system, poor people are more fucked because NO ONE pays taxes!
@kaziqbal "...when in reality voluntary exchanges only take place if both people will be better off."
You could make the same argument for public sector transactions between congressmen and contributors.
However, typically in the private sector, there is an extreme disparity of power. This power is used as leverage so there is nothing stopping the rich from getting far more than their fair share. But don't just take my word for it. Warren Buffet has said the exact same thing on you tube.
the Republicans are holding 98.5% of the country hostage for the betterment of the other 1.5% billionaires basically. "we cant raise tax on the job creators or they wont create any jobs!!" sound familiar? 33% of Americas corporations pay $0.00 in tax GE(the largest corporations in the world record profits tax liability $0.00 Bank of America tax owed $0.00 corporate America is sitting on 2 trillion dollars right now why cant they spend that on new jobs? no they need more money first i guess?
ok we ran up most of this debt with 2 unfunded wars and a prescription drug medicare add on all on the credit card. o and under a republican president and for 4 years a republican controlled legislature. now republicans are like give us what we want or we will ruin the United states of America. this is call hostage politics and guess who the hostages are? and guess who's holding them? why do they do this? because it worked for them at least 2x already. we have to vote them out in a big way:)
Krugman makes the basic zero sum error that for one to win someone else must lose, when in reality voluntary exchanges only take place if both people will be better off.
If you want a better life, get rich, or rule others through force. If you can't do that, you are an inferior being and thus you are either property or a parasite
An ideal world is one of masters and slaves. You either own or you ARE owned. Only through that can we advance the goal of individual empowerment, which makes humans strong. Civilization and morals be DAMNED!
Anything else is a childish delusion. These so-called "progressives" are the true threat to mankind. They must be destroyed!
@shadowgeyser Well they have to give it to someone sensible from time to time for it to retain any kind of legitimacy. Heck they gave it to BoBama just for getting elected, surely it should have gone to the citizens that voted for him.
I wonder which percent Krugman is in? If he thinks it's bad for a small percentage of bankers to have all of the money why is he calling for larger bailouts?
BTW Nobel prize is awarded to people for promoting statism and liberal beliefs not for anything tangible.
A moneyless,classless,stateless communities of humanity expressing our freedom in creative harmonious cooperation for a world that is so POTENTIALLY AND ACTUALLY nourishing. Capitalism in any form, Statist or Corporatist is the denial of our common humanity in a politically manipulated,tyrannical armed MARKET SYSYTEM of artificial scarcity that is designed to perpetuate the enslavement of immense humanity for material interest of the criminal ruling elite.
@bush1tman Ask your mum, maybe your father is one, however you have no point of view,stupified by your owners for a lifetime of wage slavery in a useless employment system of artificial scarcity so you are fucked for the rest of your sorry life.
@arzoyan You forget the fact that capitalist (freemarket) is neither ever corperatist of statist.. And that corporatism is only possible within statism. Never in capitalism. The entire reason the top is getting richer is because the lower classes are too regulated and taxed to compete with the SOCIALIST policy to keep big business alive and taxt the rest into extinction.
Every tax for the big guy is easy to pay, for the little man it's welfare. ever heared the expression too big to fail?
@HocVolueruntNL Your mind is colonised for a limited commercial use for the rulers of the world, Stop talking nonsense and open your mind for a truely wonderous potential of plenty in harmony and the wisdom of evolving humanity of change beyond change.
@HocVolueruntNL I keep hearing this from free marketers... but do you really thing it explains EVERYTHING about why the rich do so well for themselves? Here's the obvious reason: My great grandpa invents Wal-Mart or some other widely successful company. He passes down OWNERSHIP over this business to descendents riding the wealth of their family, while very qualified successful people slave away to this corporation making littrle money. That's still a perfectly free market economy...
Are you a moron? Capitalism does not equal free market. You have capitalism right now, within the state, in every country, especially in the United States where laissez-faire is the religion. Keeping big business afloat is not a socialist policy. In a anarcho-capitalist market big businesses would keep themselves afloat no matter what. And pay no taxes. The LITTLE GUY is taxed too much, your right, because the RICH refuse to PAY THEIR FAIR SHARE.
Until the 47% of Americans who don't pay one damn penny in federal income taxes (many of whom are getting money from the government) start paying SOMETHING, don't ask me for another fucking dime. I ain't Warren Buffett or Bill Gates, but I pay more taxes than almost ALL Americans because of our fucked up tax code. Obama thinks I am super rich. Fuck you. I work my ass off and I worked my ass off in school. I have a lot more in common with Joe Lunchbucket than Warren Buffett.
What a load of shit. Do you make more than 250,000 a year? If so, congratulations, you're awesome and you get a little higher tax rate. If not, enjoy your tax cuts. 47% is not even an accurate figure. There has been a massive redistribution of wealth in this country. It's been to the top 1%. It is what the numbers say. As much as it infuriates people (you), it is true.
You should read my posts elsewhere on this subject before commenting on the redistribution of wealth. Unlike you and Krugman, I understand EXACTLY what has happened economically and I am opposed to it. The real solution is not Krugman's light Marxism.
I am in the top 1%, but I am not a Wall Street scumbag. I actually earned my money. But I have more in common with chumps like you than I do with Buffett or Hedge Fund managers.
Are you a moron? We may have capitalism, but we are far from a free market. Fannie and Freddie? CRA? The Federal Reserve? TARP? Bail outs? Zero interest loans to Wall Street? Too big to fail?
You want real capitalism, look at China. Yes, China.
The LITTLE GUY (47%) does not pay any federal income tax to the government. Nothing is not a fair share. The RICH actually pay more than their fair share. The problem is that our system allows them to get paid more than they are worth.
The practical effect of Corporatism is to PROTECT THE HEGEMONY and PREVENT UPSTARTS from challenging it with competition.
This also works at the individual level and describes DEMOCRAT PARTY'S manipulation of the populace through its class-baiting demagoguery. While pretending to care for "the poor," the effect of their policies is to KEEP THE POOR FROM EVER ESCAPING POVERTY.
If the income gap is expanding, it is solely the fault of so-called "LIBERALISM."
The Y = C + I + G +NX should be re-written to reflect reality.
Y = C + (1.10) I + (-0.8) G and leave off the NX.
The coefficient in from of government and investment changed as the country's need for capital and the % of GDP consumption by government changes. Wouldn't it be nice if the Keynesian employed at the Federal Reserve put their minds to use figuring out the exact negative affect government spending has on the economy?
krugman, if you want to help the average typical american family then give them a real currency, and stop encouraging obama to borrow and spend and inflate the currency to nothing, because this is the real cause of the average american being worse off, and why the rich can keep gambling with all the printed money. krugman you are a socialist who "cares" about income equality, but the socialist policies your promote are just making it worse!
@astro7894 Most of this is so true. The part I'm not really convinced of is that people like Krugman believe in what they're saying. For example, you don't have to look very far to find that competition drives costs down and quality up wherever it exists. The only exceptions are things like education and healthcare, where there is government intervention (what a surprise!), yet the left keeps pushing for more intervention. Krugman is either an idiot or a shill, but I lean towards the latter.
@tulpengekte yes, i really cant work krugman out.. i actually think he has very socialist leanings and he tends to use his economic "credentials" as a cover to espousing these ideas. he is in my opinion making socialism more difficult to achieve. I do tend to support the free market, but I think there are cases where the free market should not operate (at the very least in the case of the military!), but I think letting the free market operate where it can can be a better social outcome.
Tell me that Obama doesn't constant Lie! He just lied about Repubs being against extending unemployment. McConnel just said we should do so using Stim $. Others indicate to cut the budge by 1% to pay for it, yet Obama leaves this stuff out just to gain political points among those who only listen to his word like cult members. Keynesian has FAILED EACH AND EVERY TIME it's been tried. It's ARTIFICIAL $ that gets pocketed & not spent.
It is impossible to regulate greed..If you choke it off in one place, it will find another avenue. Sheeple don't think, they react. The rich know this and use it.
@Tellerscosmos one could (as was done before the early 80's) stop companies from having monopolies or near monopolies. Walmart, for example has too much control of the market, because they make or break suppliers. Too much top down control, its not good for America. Read Cornered by Barry C. Lynn.
Maybe you need a job in real life to learn Keynesian destroys countries. Right now Obama and his Admin are a bunch of liars! Middle class will continue to suffer, worse and worse!
@WingThaiJ Absolutely false. The bush tax cuts were 100% regressive. Income tax cuts benefit the rich. The republican party supports fiscal policy, monetary policy, and tax cuts to benefit the rich.
@ogwazzo Look at what Obama has done and is doing to our deficit. Do you think he really cares? I'll send you a link of the break down, that old myth has been dispelled in reality, but not in the minds of the liberals.
Capitalism, Corporate or State dominated or In It together is the wage slavery of immense humanity for abstract process of Capital accumulation and concentration for the elite, 250 top corporations control over 1/3 of the world GDP. More than 3 billion workers are on 2 dollars a day. Capitalism is template of perpetual war,oppression,enviornmental destructions,animal cruelty and suffering, A dehumanising distorting minority imposition in thier inatiable drive for ever more Profit no matter what
Stores that cater to the masses are doing poorly he says but he ignores Walmart, which any snob knows is for the trolls to buy potato chips and cheap soda that small town stores can't undercut. Wiped out towns mean Walmart is king.
The next economic crisis, which will be inflationary depression caused by the total collapse of the dollar, will be the permanent end of our Constitution. It will be suspended by something similar to the Enabling Act of Germany. We will, as all nations do in times of crisis, turn to a charismatic totalitarian leader and permanently surrender liberty to gain temporary safety...
the journey to hardline fascism will be complete. I don't see much hope.
The Constitution is just a piece of paper and has been violated since day 1. What's more, the Constitution was not a desirable form of gov't, even the Articles of Confederation was superior.
Krugman and his ilk like to think of themselves as groundbreaking intellectuals but they're nothing more than unoriginal statist tools, never introducing any kind of literature worth a damn. Their work is always confused and mistaken on what reality actually is. They will live and die their whole lives inside that fantasy paradigm where gov't is our "servant."
Arbitrary stabilization brings more chaos. All the Ginsburgs out there do more to damage our world than any Al-Qaeda terrorist. "You will recognize what I write on this piece of paper or you will be in a cage!"
The Keynesian lack of interest or study in the longe term is what we are suffering from. We can't honestly lower taxes because we have been in a long term pattern of deficit spending. Although last year as a nation we paid in less taxes that was due to unemployment more than doubling! Working Americans are seeing the taxes as a percentage of income go up up and up!
The only thing that is in debt is gov't. It can go fuck itself as far as I'm concerned. Bring it all down--it's monopoly laws and monopoly police-military--and we'll live in a better, more ordered world through private, competitive laws and security.
Arbitrary stabilization brings more chaos. All the Ginsburgs out there do more to damage our world than any Al-Qaeda terrorist. "You will recognize what I write on this piece of paper or you will be in a cage!"
Bush said that freedom was attacked by a faceless coward.
It was. Freedom was attacked by its own government. FISA, The Patriot Act, the Military Commissions Act. Reckless spending on the welfare/warfare state has permanently cost us our economic freedom and possibly our nation's sovereignty as China buys us for pennies on the worthless dollar.
@selfrealizedexile There is a lot of debate on whether or not China will emerge as an economic superpower. They will experience all of the long term problems inherent to FIAT money. China's main advantage is they have invested in a production infrastructure, one we gutted years ago. However America is in imminent danger. Our fake economy of debt financed consumption and artificially inflated paper values of stocks and housing prices will be exposed with catastrophic results.
Although nobody wishes for the pain and suffering caused by a collapse, it seems like it is necessary medicine.
Liek I said though, crisis NEVER LEADS to freedom. It can lead to totalitarianism...AND ALWAYS TO MORE GOVERNMENT which is what caused the problems in the first place.
No, no, the pain and suffering is when we're under the thumb of a gov't, the collapse is the correction. I love recessions for the same reason--they're corrections! We must purge all toxic elements. Crises can only lead to more gov't so long as the governed are weak and immoral. The Soviet Union had a crisis and collapses. Many ex-bloc countries are much freer today. If Texas secedes, count me as a future Texan.
Thanks, I needed to read that. Just because I was thinking for a moment that more government was inevitable doesn't mean I desired it. I can at least hope that we will turn to freedom in response to the coming crisis.
As I said, abritrary stabilization (gov't) is actually the "chaos." What could you possibly desire from such an entity that by definition brings that to the table?
China has pegged their currency to the US dollar, which FORCES them to buy US dollar assets to maintain the peg. China has used their slave labor and forced savings to become the manufacturing center for the entire world. This has allowed them to modernize their country.
What did we get? We got cheap goods and fewer jobs. We hid the job loss from outsourcing with the DotCom and Housing Bubbles. The real economy is now exposed and so is the damage.
Just simple speculation that the Fed will tighten monetary policy sent the markets into a two day plunge. That alone should indicate how much of this recovery is merely inflationary expansion created by monetary policy. The same monetary and credit expansion which led to countless crisises, bubbles and collapses in the 20th century.
The recovery is phony and will collapse. I fear the severity of the crisis when our current bubble bursts
However economists are correct to be concerned about upcoming inflation but looking at the numbers taxes are almosty irrelevant because the amount of stimulus coming from The Fed dwarfs tax revenue (it could max out at 23 trillion dollars.) That's the reason there is so much talk about when the Fed will raise rates is fear of monetary inflation.
I definitely agree that credit redistributes income from the poor and middle class to the ultra wealthy but how does inflation do that? (That's a real question, not a challenge).
And I might mention that getting laws passed to help them outsource our jobs to India and China is another way they transfer our income into their pockets.
@Skydancer365 You can find some writings on the mises website. The work of John Keynes also mentions the effect of inflation on redistribution of income and wiki has a direct quote from him about it. Happy researching! I'm not sure I can explain it in 500 words.
Inflation is why the rich get richer. Marx, Adam Smith, Lenin, Hayek and even JOHN KEYNES all agreed that inflation leads to the redistribution of wealth from the poor and middle class to the rich.
Why can't Krugman see that his HERO, John Keynes, said it was inflation? He STILL supports government mandated, centrally planned inflation. He is still playing the class warfare card.
Krugman is a fool that supported everything that caused this meltdown in the first place.
Over 5 million Americans who are poor today, were not in 2000. The number of families in poverty has increased by 19 percent since 2000. As the bottom half of American workers saw their share of national income decline, the wealthiest 1 percent saw a huge increase in their overall share. The wealth in America is now more concentrated than it has ever been before in our lifetimes. That's why conditions are so miserable for working Americans in this country!
@CosmicFork According to accurate formulas that represent inflation, we saw 9% year over year inflation up until 2008.
Monetary policy also contributes to inflation and the phenomenon of large wealth concentration.
I see a lot of differing understandings of the current situation today but I am assured by the fact that I see nobody who thinks this system of partnership between big business and government can do any good.
What about the rise in the number of WORKING POOR?
Yeah, Krugman supports bailouts and deficit spending and fiat currency devaluation.. he pretends to be a socialist, but he proposes policies that just take from peoples liberty and steals their savings. its socialist economist like krugman that actually make the gap between rich and poor even larger! how ironic mr. krugman
The wealth in America is more concentrated than ever before in our lifetimes. The workers have been stripped of all power, and are treated like disposable units of labor, while Corporate CEO's are rewarded in a manner beyond imagining. But, it is in the interests of the wealthy, to keep workers unemployed and hungry. The rich are too polite to say it aloud, but they know that poverty rocks for them. Poverty is profitable for them. Poverty makes their stocks go up, and labor costs go down!
Enough time to give me 2-3 clauses, but not a yes or no answer to my question.
Yes, I'm 22. Idk about the punk part...? lol, I'm a perfectly mature, frank, and educated man. Your *theory* about the rich was utterly pathetic. You have no evidence to support your claim empirically not to mention it's easily made foolish in the theoretical realm.
If you're so sure of yourself, why are you isolationary? It sounds like you just want to rant and someone called you on it.
So, the rich people, like Bill Gates perhaps, WANT people to be poor and NOT be able to afford the things he manufactures? Might wanna rethink that and come back later. cowboy.
So, the rich people, like Bill Gates perhaps, WANT people to be rich and NOT need to get a job producing the things he manufactures? Might wanna rethink that and come back later. voodooshizzle.
"Free market" compared to what? To Australia? Finland? Mexico? Markets are totally free only when no government exists, and in any democratic society there is going to be a relationship between government and the tension between consumers and private businesses.
are you replying to me? because the answer is yes. I'm a fourth year student who has studied quenay (spelling?) adam smith, john maynard keynes, thorstein veblen a little bit of milton friedman. Currently I'm studying the evolution of economic thought which surprisingly includes john locke. So i have my opinions, and if your criticising that last post, it was a reply to the concept of a privatized policing force and fire dept.
I actually am going to read up on the austrian school after graduation. I like how they don't rely too heavily on economic models of unreal worlds of perfect competition. But I would be very hesitant to say any school of economics is "right" regardless if they're classicals, neo-classicals, marxists, keynsians, physiocrats, or austrians. Assuming that ONE approach to economics applies to EVERY situation would be a mistake. It's like saying only 1 management style is effective for everyone.
The Austrian school is not right when it comes to their unwavering support for the 100% gold standard. The gold standard has too many downfalls. I strongly support abolishing the Fed, but returning to the gold standard would be silly. I'm more in line with The Chicago School and Milton Friedman than the Austrian School with Rothbard and Mises.
Can you explain why you are for an inflatable currency? Remember, when you inflate a currency, only the political insiders get this money first, and spend it, before prices rise. There is a reason why the top economists have always preferred a commodity standard. And Milton Friedman has had many shortfalls and this was one of them. He argued with Mises that the price of Gold would drop below 35 dollars when the link to the dollar was removed in 71, whereas MIses said it would rise to double in..
Its not a gold standard per se, it is about a commodity standard, but most importantly it is about a lack of embezzlement, aka fractional banking, which is the real problem. Its not just the Austrians that advocate a gold standard . Gold is honest money, paper is not. John Forbes Nash came out recently and said he was in favor of a gold standard. Joseph Schumpeter, arguably one of the best economists of our day also advocates the same. Same with forbes.
Just because I think a metallic standard is too ignorant for modern times and not ideal, doesn't mean that I support inflation. Do you support deflation? That is what happened under the gold standard in the US and Britain during the industrial revolution. Tying output to gold had too many downfalls, this just being the first of many.
If I had to choose between our current situation and the gold standard, I'd choose the gold standard in a second.
Yes deflation is a good thing. In fact its a great thing. , We see deflation in certain sectors of the economy all the time. Do you think the deflation we see in computers and other electronics is a bad thing. Deflation is a good sign because this means that our productivity has increased. The only time deflation is bad, that is when people might hoard because of it, is during recessions which are results of a lack of a strict 100% gold standard. By 100% I mean full fractional banking.
I disagree that it is THE best medium of exchange, but do agree that it is the most honest and safe.
First and foremost, if well thinking economists and concerns citizens don't defeat this blow hart (Krugman), we will continue down the road to hell, paved with good intentions.
Who do think will be buyin all these imsolvent homes, the rich. If you cannot play in the fiscal arena as the opulent then you are merely screwed and are at the merci of them. This financial crisis is the perfect setting for rich to get richer.
Mediterraneanblue9, you wrote: "This financial crisis is the perfect setting for rich to get richer." Yep. The power-elite know what has true value and what doesn't; and they're buying up assets-- for pennies on the dollar-- which others have cast off in a panic to get out of what they see as a sinking ship in a storm. Well, the ship might be sinking, but there's gold, silver & precious gems in the hule, and the power-elite have secured sole diving rights to go get it when the sea gets calmer.
People keep talking about "class warfare" as if it's a bad thing. IMHO, we NEED some class warfare right now.
Conservatives and Libertarians talk about progressive taxation as if it's stealing from the rich, but I prefer to look at it slightly differently. If they're making billions of dollars, it's because they aren't paying us the wages we deserve or they've helped rig the economy so that we're not (or both). So they're STEALING OUR LABOR! So, yes, we'll steal some of it back!
That isn't how it works. Wealth is not a zero some game. Your post implies that there is a set amount of wealth, and that when one gets more, another gets less. This couldn't be further from the truth. Free market competition is what brings about and maintains quality, not government regulation, and redistribution of wealth.
Well, that's one economic opinion amongst Nobel Laureates. One that I used to believe in, but since the economic collapse I don't believe in anymore
Plus, I don't believe that the concept of a "zero sum" game has anything to do with competition (which I strongly believe in....I just believe it needs restrictions).
Yes, well, that's one theory. A theory that conveniently favors the opulent Republican not-really-conservatives. A theory I used to believe in, but don't anymore.
Another thing to consider is that even if it isn't a "zero sum" game, increased income inequality gives the opulent more power to "game the system". To twist and pervert it in their favor. Which they have done.
how does income inequality have anything to do with manipulating the market place, or "gaming the system" as you call it? How would it be more difficult to "game the system" if income inequality were lessened?
Many ways. One is that the opulent have more money to pay to politicians to pass laws and policies in their favor. Another way is that they create bubbles by infusing their wealth into the economic markets (and even creating new markets), then, when the bubble begins, the middle class jump onto the bandwagon (401ks), but the opulent, being more financially astute, pull out & put their money in other markets at the top of the bubble, the bubble collapses, sucking wealth out of the middle class.
You don't think there are opulent in western europe, and other places with less income inequality have rich people who are capable of bribing politicians? In a truly free maket, there would be a constitutional amendment separating private sector and the state. And the wealthy do not create bubbles lol. The FED does. Listen to some Ron Paul, and Milton Friedman videos here on youtube. You're become a Libertarian in no time ; )
Well, the reason I gave up being a Libertarian is because I was convinced that it's a fantasy. I no longer believe it can work. I believe, If the power of the government doesn't balance the power of corps, then one, or a few, giant corps eventually rise to the top of the heap and I don't believe the market place has the ability to stop it. Corps essentially BECOME the gvt and become too big to fail so we have to have corporate socialism to bail them out.
Skydancer365: I have read all your post here, & totally agree with you. I spent the past year listening intently to Ron Paul & his ideas about the rule of law & free markets. I was also listening to & watching the behavior of the Neo-cons, the corporate talking heads that kept showing up on CNN & the Republican base , and I came to the conclusion that no market will ever be fair & free because human beings are by nature greedy hoarding beasts who can not be trusted to regulate themselves.
If it takes scarcity to make humans greedy, hoarding beasts, then how do you explain the behavior of the power elite?
Resources are not as scarce as they would like us to think. They are manipulated. If there's supposed to be a food shortage, why do they pay farmers not to farm. If there's a fuel shortage & global warming, why do they patent & hide away technologies which will free the world from its dependence on filthy oil, gas & coal?
lol... you don't have a clue on how a free market works. Free markets can self regulate as long as governments do not interfere with them. Your blaming capitalism for the problems government has created.
return135: you would be right about the ability of a free market to self regulate without government intervention if we were dealing with the garden variety businesses of the past, but were not. The system is corrupt. Massive global corporations have wheedled their way into governments and seized control of things that private for-profit organizations never should have been allowed to meddle with. Corporations interfere with the markets in exactly the way you say valid governments shouldn't.
Yes, the markets are corrupted. Governments have become far too involved in the markets because they have not followed the constitution. If the government could just not interfere with the economy things would not be corrupted because businesses would be forced to provide products consumers want instead of lobbying congress. Also, anti-trust laws were intended to prevent monopolies but they do the opposite. They allow big business to set the rules in their favor which destroys small businesses.
I realize I'm a little late for this argument but I have a point to make. The market does have the ability to self-regulate in the LONG-RUN, however most people can't wait that long. And if the public sector is so disastrous, why don't we privatize fire depts, police depts, and the military. I'm sure someone such as yourself would be happy to agree to a bill from the fire dept for putting out the fire in your house right?
Well if you asked the great historian/economist Murray Rothbard all those things you mentioned including roads could be privatized and work very efficiently and even better. Also, you already do pay for all those things in taxes. Ex) take the fire dept, you might have some sort of insurance that you could buy, while the companies compete for the consumers by lowering their costs, unlike the socialized fire dept.
Sorry about the sarcasm, but in truth the market has been given placed on this godly pedestal by mainstream economics , but even Adam Smith was distrustful of businessmen or in his words from the wealth of nations, the "master class" and felt that govt intervention was necessary when dealing with them. Though to be fair he doesn't elaborate much on how we should deal with them, but leaves it up to society to find that plan.
Businesses are regulated by their consumers/shareholders/profit and loss, and fraud laws. not by some sec bureaucrat. Govt intervention, by regulation/taxes etc... distort markets, make it inefficient, and make people poorer. Also, i don't think people give enough respect to the free market.
Your argument is true only in the setting of a perfectly competitive environment, which doesn't and will never ever exist. Remember in California when lobbyists got their way and cali deregulated the power companies (Enron)? These private companies restricted output, raised prices, and basically "raped" cali and put us into a debt that we never got out of. How then if govt regulation was a problem, did we not achieve efficiency when legislation deregulated?
Enron was a case of fraud which was not caused by a "deregulation", and it was taken care of through state fraud laws. Listen, a lot of these problems when you look into them it is often a case of government getting involved with the different companies making inside deals, not laissez-faire capitalism.
When I talk about Enron, I'm not talking about their accounting fraud, I'm talking about their legal (cuz of deregulation) business practices. They would close their power plants and restrict supply to create rolling blackouts (I lived thru it), and drive up the prices. Acting exactly as monopolistic company would do! They then auctioned off energy to the highest bidder. Cali stupidly agreed to deregulation on the basis that it would bring about competition and cheaper prices.
My guess is that it was not "deregulation" but rather it was some sort govt law damaging their competition or the govt gave powers to enron that a regular business wouldnt have(which wouldnt necessarily be dergulation). I would have to look into that situation because there is probably more to the story than just simple deregulation.
I'm not saying that the free market will never work, but that the reality is that there are times when it can fail. Now I'm not a pro-govt kind of guy, really i'm not, but there are some situations that call for govt intervention. I don't wana have to worry about insurance when my house is on fire, i just want the fire dept to put the fire out for me and Im willing to pay taxes for that. I want the police dept to arrest whoever robbed me without having to pay a bill first, see my point?
Obviously the free market is not perfect, humans make mistakes. However, it is the best system out there. My goal is to have a voluntary society where there is no government coercion. Also, if the govt stop providing fire/police it would not be the end of the world, other companies would come in and do a better job. A hampered market economy,which you desire, is not the best option. A free market may not exist now but the closer society is to it the better off everyone is.
Laissez fair is what led to and perpetuated a depression during the 1930's. ya know... thousands of bank failures and a credit freeze. Also, I don't mean to sound cynical, but I highly doubt that a private company motivated by "profits" would do a better job of arresting a criminal than a state trooper. In fact, I would assume that a private company would perform crimes so that they could get paid to stop the crime. Ya know, extortion, which is closely associated to organized crime.
you have just perpetuated a huge myth on the great depression. You should read murray rothbards book on america's great depression or there are some great videos at the youtube channel misesmedia on the GD. The Private company would get paid on results so they would be more motivated. Also, they wouldnt perform crimes b/c it would damage their business reputation and its would be against the law! you could take them to court. State police focus on trivial things like drugs and giving tickets
Forgive me for believing that a private company would ever break the law for profits. All those stories about mechanics taking advantage of customers, doctors abusing health insurances, peanut producing companies shipping out contaminated products, cigarette companies hiring fake scientists, etc... it's all just a myth right? I mean why would they even think about breaking the law for profits....
Because the big bad government is out to destroy the world through socialism AND fascism, and Barack Obama is a racist christian/muslim terrorist who wasn't even born in the U.S. because he still hasn't showed us his birth certificate and he's going to raise taxes (to a rate that is still below Ronald Reagan's rate), and Foxnews and Glenn Beck are my heros. That's why I'm paranoid. **PLEASE SENSE THE SARCASM**
You're an idiot to make baseless claims like that. Or you're some retarded high school kid thinking he understands economics because you took one or two courses or lectures. Tell me where I said I was scared of bankers. I AM a banker. Tell me where I said I was anti-semetic. Tell me if you understand why I said some mechanics are corrupt. Do you even know the difference between the public and private sector? You don't belong in this conversation, and I'm not going to respond to you anymore.
wow you are real jizz bucket. you claimed the great depression was caused by a credit freeze, and those greedy bankers on wall street. a common scapegoat among shallow minds to blame the worlds problems on a few greedy people. you made a bizzare claim of mechanics being an example of market failure. of course i understand economics more than you seeing you dont know shit.
i do sense economic ignorance. economic decisions are made on the margin. tax rates at time t0 are not same as tax rates at time t1. going to a higher tax rate, especially in this environment is destructive. Reagan lowered tax to a certain level he didnt raise them.
While it's true that a higher tax rate in this environment could hinder growth, my satirical rant above was more based on right wing paranoia. Obama hasn't raised the tax rate, he's letting them expire in two years. Now as for the argument to lower taxes, i recall last year when 350 billion was given back to consumers and still failed to halt or slowdown our recession. I've yet to see any empirical evidence that show tax cuts are the most effective fiscal policies.
If people were to save, laze-faire economics say that interest rates would be lowered, & induce investment. However banks are hesitant about lending in this type of economic environment (rightly so). And the Reagan tax cuts being responsible for 2 decades of growth is debatable. Remember after FDR's new deal there was 3 decades of economic growth?Again that's debateable. I'd say that Reagan was responsible for fixing the Fed's unstable lags which is the cause of stagflation during that decade.
banks are hesitant about lending because there are no real savings. no real economic wealth so credit fears are high. interest rates are artificially low. w/o the fed, int rates would be much higher to reflect the scarcity of savings to lend. there is no debate otherwise you would be able to offer another reason for prosperity. if fdr's new deal worked then why did the depression last so long? why did we only recover after ww2.
u can't have it both ways & say that people saved their tax rebates but that theres no real savings. stagflation is simply a product of incorrect usage of keynsian policy, not accounting for lags. as i said, it's debatable as to how effective the new deal was (even keynes himself said it would not be as effective), but since WWII forced the U.S. into keynesian fiscal policies, unemployment dropped to 2% and thats why the depression ended. Because demand increased & businesses responded.
a one time tax rebate cannot does not set a trend for savings. consistent tax savings are needed.
since whn does war=prosperity. ppl worked long hours and goods were rationed. doesnt sound like economic prosperity to me. prosperity began AFTER the war. GDP and unemplymnt gets skewed when there is govt intervention. the govt can hire all wrkers & pay anythng they like for goods to raise GDP. their demands are not consistent with society's needs so the "prosperity" we see in the #s are misleading
So 350 billion just leaked out of the system over night?! U either spend or u save, nothing else u can do with money. U just said people 'SAVED' their rebates, where did the $ go? WWII forced the government to put people to work, which gave them $ to spend and let the ripple effect stimulate growth! It was a prime example of Keynsian economics. If it could work in war-time, why can't it work in peace time. It is consistent w societies needs because its people purchasing that cause prosperity!
350B~3% of GDP. where would you see it show up? that's my point it didnt. the so called multiplier is a myth. we must first produce before we consume.
ppl must spend to clear inventory but we wont revive the economy until prices drop sufficiently. currently we are trying to reflate the economy. it wont work.
again what growth are you talking about? the govt could spend a billion dollars on a hammer. the gdp then increases by 1B. is that prosperity. ww2 was not prosperity.
3% of gdp is a lot, don't belittle that amount. In fact if GDP were to grow by that amount, we would say our economy is strong. & this 'Say's law' argument u keep repeating, it's incomplete. Production motivation is a function of supply AND demand. & the growth I'm talking about is the consumer spending. Gov't isn't to buy hammers & whatnot, it's to put people to work, giving them income to put back into the economy. That's why the market is still reflective of society, people are purchasing!
In this exact situation, I do think it's viable. As far as it being real? I think it's just as real as all of the other economic philosophies... in other words it's just a theory, like the rest of them. Ron Paul huh? Must be an Austrian. He's a smart guy, I'd probably have voted for him over McCain. At least he doesn't hate econ and thinks in depth about things.
Yes I am an Austrian, and Keynesianism is a bunch of fallacies. It's so bad, I dont know where to start. And this instance is probably the worst instance we can be using it. You need to do some research on the depression of 21 to see what NEEDS to be done during a recession. Keynesianism is what causes recessions to become depressions. If you have time, read "the failure of new economics" by Henry Hazlitt, and you will never look at Keynesianism the same way.
There are two sides to every story. You can sit there and claim that Keynsianism is what causes boom & bust cycles. I can sit here and say that boom/bust cycles are a result of the free market endogenously. Remember that the theoretical economic world you think of doesn't and will never exist. No offense intended (I mean this), but I'd be more interested in your opinion if it was backed up by empirical evidence, not just theory.
C+I+G+(n-x) * MUltiplier, whereas the multiplier is (1/1-mpc).. If total spending is 1000 by the economy, and people consume 90% of income, our gdp is therefore 10,000 because of the multiplier of 10. Fair enough. Now if we consume 95% of income our GDP rises to 20,000. If we consume 99% of our income, GDP rises to 100,000k, if we consume 99.9% our GDP rises to 1 million! 99.99% MPC raises GDP to 2 million. Ad infinitum.
The U.S. MPC has always empirically been around 90%. This formula does not assume that consumers hoard. It assumes savings, which is a leakage to be plugged by investment. Have you heard of an IS or IS/LM curve? He does not recommend war, but the war was viewed as an example of Keysnian fiscal policies. Have you ever studied anything other than Austrian economics? I"m so sick of these false accusations. How about learning about something before you have an opinion of it.
Actually you havent read the General theory. In Page 118 he says that building pyramids or wars will create wealth. YOu need to read Keynes before saying false accusations. What is your point about the MPC being 90%, my point is that there is no empirical evidence on Keynes Multiplier effect. ZERO. And do you realize what the multiplier effect suggests? It tells us that we can technically have an income of infinity. (yes I know 1/0 is undefined, but you get my point). I got my degree in econ...
The MPC being 90% is what's real in america, why try to take it to 99.99% when it's not reality. It's an explanation of our purchasing behavior. I'm also getting my degree in econ. Now I'm not a Keynsian per se, but I will defend him from false accusations.
Krugman just regurgitates some statistics. That's apparently all Keynesian economists are capable of doing, because they don't have any fundamental understanding of anything really.
Look towards the Austrian school of economics for REAL UNDERSTANDING.
Krugman = the biggest charlatan in history.
8chxBLhJDy9 1 month ago
rich are getting poorer in this economy and the stock market.
fuck off socialist moron.
Look at Spain, Greece and Italy. All Dummycrat countries.
Ibringthetruth1 4 months ago
this from a guy who charges around 20k just to talk lol
cokanesic 4 months ago
this guy is a TOTAL idiot
mgallant01 4 months ago
ENVY
BaldyV 5 months ago
WHY would you cut taxes for ALL income classes, and HOW would the poor benefit from the rich in the country paying no taxes i.e. no social welfare. In THAT system, poor people are more fucked because NO ONE pays taxes!
GnomesAmok 5 months ago
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The poor are poor because they are lazy and stupid.
WarmongerWW3 6 months ago
@kaziqbal "...when in reality voluntary exchanges only take place if both people will be better off."
You could make the same argument for public sector transactions between congressmen and contributors.
However, typically in the private sector, there is an extreme disparity of power. This power is used as leverage so there is nothing stopping the rich from getting far more than their fair share. But don't just take my word for it. Warren Buffet has said the exact same thing on you tube.
sfjeff1089 6 months ago
the Republicans are holding 98.5% of the country hostage for the betterment of the other 1.5% billionaires basically. "we cant raise tax on the job creators or they wont create any jobs!!" sound familiar? 33% of Americas corporations pay $0.00 in tax GE(the largest corporations in the world record profits tax liability $0.00 Bank of America tax owed $0.00 corporate America is sitting on 2 trillion dollars right now why cant they spend that on new jobs? no they need more money first i guess?
gawaine05 6 months ago
ok we ran up most of this debt with 2 unfunded wars and a prescription drug medicare add on all on the credit card. o and under a republican president and for 4 years a republican controlled legislature. now republicans are like give us what we want or we will ruin the United states of America. this is call hostage politics and guess who the hostages are? and guess who's holding them? why do they do this? because it worked for them at least 2x already. we have to vote them out in a big way:)
gawaine05 6 months ago
Krugman makes the basic zero sum error that for one to win someone else must lose, when in reality voluntary exchanges only take place if both people will be better off.
kaziqbal 8 months ago
Walmart is doing terribly?
ak47523 10 months ago
If you want a better life, get rich, or rule others through force. If you can't do that, you are an inferior being and thus you are either property or a parasite
An ideal world is one of masters and slaves. You either own or you ARE owned. Only through that can we advance the goal of individual empowerment, which makes humans strong. Civilization and morals be DAMNED!
Anything else is a childish delusion. These so-called "progressives" are the true threat to mankind. They must be destroyed!
grimwald8 11 months ago
@shadowgeyser Well they have to give it to someone sensible from time to time for it to retain any kind of legitimacy. Heck they gave it to BoBama just for getting elected, surely it should have gone to the citizens that voted for him.
jimberkt 1 year ago
I wonder which percent Krugman is in? If he thinks it's bad for a small percentage of bankers to have all of the money why is he calling for larger bailouts?
BTW Nobel prize is awarded to people for promoting statism and liberal beliefs not for anything tangible.
jimberkt 1 year ago
A moneyless,classless,stateless communities of humanity expressing our freedom in creative harmonious cooperation for a world that is so POTENTIALLY AND ACTUALLY nourishing. Capitalism in any form, Statist or Corporatist is the denial of our common humanity in a politically manipulated,tyrannical armed MARKET SYSYTEM of artificial scarcity that is designed to perpetuate the enslavement of immense humanity for material interest of the criminal ruling elite.
arzoyan 1 year ago
@arzoyan Stupid hippie
bush1tman 11 months ago
@bush1tman Ask your mum, maybe you are dad was one.
arzoyan 11 months ago
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@bush1tman Ask your mum, maybe you are dad was one.
arzoyan 11 months ago
@bush1tman Stupid are your owners.
arzoyan 11 months ago
@bush1tman Ask your mum, maybe your father is one, however you have no point of view,stupified by your owners for a lifetime of wage slavery in a useless employment system of artificial scarcity so you are fucked for the rest of your sorry life.
arzoyan 11 months ago
@arzoyan You forget the fact that capitalist (freemarket) is neither ever corperatist of statist.. And that corporatism is only possible within statism. Never in capitalism. The entire reason the top is getting richer is because the lower classes are too regulated and taxed to compete with the SOCIALIST policy to keep big business alive and taxt the rest into extinction.
Every tax for the big guy is easy to pay, for the little man it's welfare. ever heared the expression too big to fail?
HocVolueruntNL 9 months ago 14
@HocVolueruntNL Your mind is colonised for a limited commercial use for the rulers of the world, Stop talking nonsense and open your mind for a truely wonderous potential of plenty in harmony and the wisdom of evolving humanity of change beyond change.
arzoyan 9 months ago
@HocVolueruntNL I keep hearing this from free marketers... but do you really thing it explains EVERYTHING about why the rich do so well for themselves? Here's the obvious reason: My great grandpa invents Wal-Mart or some other widely successful company. He passes down OWNERSHIP over this business to descendents riding the wealth of their family, while very qualified successful people slave away to this corporation making littrle money. That's still a perfectly free market economy...
Spudst3r 6 months ago
@Spudst3r well it would not be right if your grandpa didnt gave u anything...
DoelGr 6 months ago
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@HocVolueruntNL you got it correct!!
DoelGr 6 months ago
@HocVolueruntNL
Are you a moron? Capitalism does not equal free market. You have capitalism right now, within the state, in every country, especially in the United States where laissez-faire is the religion. Keeping big business afloat is not a socialist policy. In a anarcho-capitalist market big businesses would keep themselves afloat no matter what. And pay no taxes. The LITTLE GUY is taxed too much, your right, because the RICH refuse to PAY THEIR FAIR SHARE.
GnomesAmok 5 months ago
@GnomesAmok
Until the 47% of Americans who don't pay one damn penny in federal income taxes (many of whom are getting money from the government) start paying SOMETHING, don't ask me for another fucking dime. I ain't Warren Buffett or Bill Gates, but I pay more taxes than almost ALL Americans because of our fucked up tax code. Obama thinks I am super rich. Fuck you. I work my ass off and I worked my ass off in school. I have a lot more in common with Joe Lunchbucket than Warren Buffett.
666sigma 5 months ago
@666sigma
What a load of shit. Do you make more than 250,000 a year? If so, congratulations, you're awesome and you get a little higher tax rate. If not, enjoy your tax cuts. 47% is not even an accurate figure. There has been a massive redistribution of wealth in this country. It's been to the top 1%. It is what the numbers say. As much as it infuriates people (you), it is true.
GnomesAmok 5 months ago
@GnomesAmok
You should read my posts elsewhere on this subject before commenting on the redistribution of wealth. Unlike you and Krugman, I understand EXACTLY what has happened economically and I am opposed to it. The real solution is not Krugman's light Marxism.
I am in the top 1%, but I am not a Wall Street scumbag. I actually earned my money. But I have more in common with chumps like you than I do with Buffett or Hedge Fund managers.
666sigma 5 months ago
@666sigma You know, I'm not convinced that someone in the top 1% sits around writing comments on youtube videos.
DanLetts97 2 months ago 2
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@DanLetts97
Do you think I give a shit what you think?
666sigma 2 months ago
@GnomesAmok
Are you a moron? We may have capitalism, but we are far from a free market. Fannie and Freddie? CRA? The Federal Reserve? TARP? Bail outs? Zero interest loans to Wall Street? Too big to fail?
You want real capitalism, look at China. Yes, China.
The LITTLE GUY (47%) does not pay any federal income tax to the government. Nothing is not a fair share. The RICH actually pay more than their fair share. The problem is that our system allows them to get paid more than they are worth.
666sigma 5 months ago
@HocVolueruntNL You got it right, sir!
wallstreetatheist 2 months ago
@HocVolueruntNL
More to the point:
The practical effect of Corporatism is to PROTECT THE HEGEMONY and PREVENT UPSTARTS from challenging it with competition.
This also works at the individual level and describes DEMOCRAT PARTY'S manipulation of the populace through its class-baiting demagoguery. While pretending to care for "the poor," the effect of their policies is to KEEP THE POOR FROM EVER ESCAPING POVERTY.
If the income gap is expanding, it is solely the fault of so-called "LIBERALISM."
UncleIrv 2 months ago
The wealthy create wealth.
hyetalian1 1 year ago
@hyetalian1 by stealing.
radoa1 1 year ago
@radoa1 Anyone who steals wealth does so only through government.
dbill27 1 year ago
@dbill27 yeah great example -like through the military industrial complex
radoa1 1 year ago
if the ''top'' will lose then america will not exist
MegaVladimir1988 1 year ago
If the top 1% didn't continue to make money (but rather lost money), then they would no longer be in the top 1%.
drj90210 1 year ago
The Y = C + I + G +NX should be re-written to reflect reality.
Y = C + (1.10) I + (-0.8) G and leave off the NX.
The coefficient in from of government and investment changed as the country's need for capital and the % of GDP consumption by government changes. Wouldn't it be nice if the Keynesian employed at the Federal Reserve put their minds to use figuring out the exact negative affect government spending has on the economy?
I am not going to hold my breath.
Truthpolice9698 1 year ago
Krugman is a fking retard
karkelkhan 1 year ago
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@karkelkhan with a nobel prize in economics....
quackbeef 1 year ago
krugman, if you want to help the average typical american family then give them a real currency, and stop encouraging obama to borrow and spend and inflate the currency to nothing, because this is the real cause of the average american being worse off, and why the rich can keep gambling with all the printed money. krugman you are a socialist who "cares" about income equality, but the socialist policies your promote are just making it worse!
astro7894 1 year ago
@astro7894 Most of this is so true. The part I'm not really convinced of is that people like Krugman believe in what they're saying. For example, you don't have to look very far to find that competition drives costs down and quality up wherever it exists. The only exceptions are things like education and healthcare, where there is government intervention (what a surprise!), yet the left keeps pushing for more intervention. Krugman is either an idiot or a shill, but I lean towards the latter.
tulpengekte 1 year ago
@tulpengekte yes, i really cant work krugman out.. i actually think he has very socialist leanings and he tends to use his economic "credentials" as a cover to espousing these ideas. he is in my opinion making socialism more difficult to achieve. I do tend to support the free market, but I think there are cases where the free market should not operate (at the very least in the case of the military!), but I think letting the free market operate where it can can be a better social outcome.
astro7894 1 year ago
Tell me that Obama doesn't constant Lie! He just lied about Repubs being against extending unemployment. McConnel just said we should do so using Stim $. Others indicate to cut the budge by 1% to pay for it, yet Obama leaves this stuff out just to gain political points among those who only listen to his word like cult members. Keynesian has FAILED EACH AND EVERY TIME it's been tried. It's ARTIFICIAL $ that gets pocketed & not spent.
WingThaiJ 1 year ago
It is impossible to regulate greed..If you choke it off in one place, it will find another avenue. Sheeple don't think, they react. The rich know this and use it.
Tellerscosmos 1 year ago
@Tellerscosmos one could (as was done before the early 80's) stop companies from having monopolies or near monopolies. Walmart, for example has too much control of the market, because they make or break suppliers. Too much top down control, its not good for America. Read Cornered by Barry C. Lynn.
pvisserandorra 1 year ago
Krugman is an ass. I used to think he was an intellectual but realized he's just a whore for the leftist political establishment.
truevoice08 1 year ago
@truevoice08 spot on!
astro7894 1 year ago
Maybe you need a job in real life to learn Keynesian destroys countries. Right now Obama and his Admin are a bunch of liars! Middle class will continue to suffer, worse and worse!
WingThaiJ 1 year ago
@WingThaiJ Absolutely false. The bush tax cuts were 100% regressive. Income tax cuts benefit the rich. The republican party supports fiscal policy, monetary policy, and tax cuts to benefit the rich.
ogwazzo 1 year ago
@ogwazzo Look at what Obama has done and is doing to our deficit. Do you think he really cares? I'll send you a link of the break down, that old myth has been dispelled in reality, but not in the minds of the liberals.
WingThaiJ 1 year ago
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Capitalism, Corporate or State dominated or In It together is the wage slavery of immense humanity for abstract process of Capital accumulation and concentration for the elite, 250 top corporations control over 1/3 of the world GDP. More than 3 billion workers are on 2 dollars a day. Capitalism is template of perpetual war,oppression,enviornmental destructions,animal cruelty and suffering, A dehumanising distorting minority imposition in thier inatiable drive for ever more Profit no matter what
arzoyan 1 year ago
Stores that cater to the masses are doing poorly he says but he ignores Walmart, which any snob knows is for the trolls to buy potato chips and cheap soda that small town stores can't undercut. Wiped out towns mean Walmart is king.
glambike 1 year ago
The next economic crisis, which will be inflationary depression caused by the total collapse of the dollar, will be the permanent end of our Constitution. It will be suspended by something similar to the Enabling Act of Germany. We will, as all nations do in times of crisis, turn to a charismatic totalitarian leader and permanently surrender liberty to gain temporary safety...
the journey to hardline fascism will be complete. I don't see much hope.
mongoose704 1 year ago
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mongoose704 1 year ago
@mongoose704
The Constitution is just a piece of paper and has been violated since day 1. What's more, the Constitution was not a desirable form of gov't, even the Articles of Confederation was superior.
selfrealizedexile 1 year ago
Krugman and his ilk like to think of themselves as groundbreaking intellectuals but they're nothing more than unoriginal statist tools, never introducing any kind of literature worth a damn. Their work is always confused and mistaken on what reality actually is. They will live and die their whole lives inside that fantasy paradigm where gov't is our "servant."
selfrealizedexile 1 year ago
Arbitrary stabilization brings more chaos. All the Ginsburgs out there do more to damage our world than any Al-Qaeda terrorist. "You will recognize what I write on this piece of paper or you will be in a cage!"
selfrealizedexile 1 year ago
Idk why people still listen to this fool. The only people who still take him seriously are those wanting to give him a rimjob.
selfrealizedexile 1 year ago
@selfrealizedexile
The Keynesian lack of interest or study in the longe term is what we are suffering from. We can't honestly lower taxes because we have been in a long term pattern of deficit spending. Although last year as a nation we paid in less taxes that was due to unemployment more than doubling! Working Americans are seeing the taxes as a percentage of income go up up and up!
mongoose704 1 year ago
@mongoose704
The only thing that is in debt is gov't. It can go fuck itself as far as I'm concerned. Bring it all down--it's monopoly laws and monopoly police-military--and we'll live in a better, more ordered world through private, competitive laws and security.
selfrealizedexile 1 year ago
@selfrealizedexile
Arbitrary stabilization brings more chaos. All the Ginsburgs out there do more to damage our world than any Al-Qaeda terrorist. "You will recognize what I write on this piece of paper or you will be in a cage!"
selfrealizedexile 1 year ago
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mongoose704 1 year ago
@mongoose704
Freedom's gov't is nature itself--no man.
selfrealizedexile 1 year ago
@selfrealizedexile
Bush said that freedom was attacked by a faceless coward.
It was. Freedom was attacked by its own government. FISA, The Patriot Act, the Military Commissions Act. Reckless spending on the welfare/warfare state has permanently cost us our economic freedom and possibly our nation's sovereignty as China buys us for pennies on the worthless dollar.
mongoose704 1 year ago
@mongoose704
China is actually the current loser as they are financing a man who has no intention of paying back. Therefore, they are in the red, not the US.
selfrealizedexile 1 year ago
@selfrealizedexile There is a lot of debate on whether or not China will emerge as an economic superpower. They will experience all of the long term problems inherent to FIAT money. China's main advantage is they have invested in a production infrastructure, one we gutted years ago. However America is in imminent danger. Our fake economy of debt financed consumption and artificially inflated paper values of stocks and housing prices will be exposed with catastrophic results.
mongoose704 1 year ago
@mongoose704
The sooner it collapses the better. Americans have to realize nothing ever good came from gov't; actual progress comes from actual work.
selfrealizedexile 1 year ago
@selfrealizedexile
Although nobody wishes for the pain and suffering caused by a collapse, it seems like it is necessary medicine.
Liek I said though, crisis NEVER LEADS to freedom. It can lead to totalitarianism...AND ALWAYS TO MORE GOVERNMENT which is what caused the problems in the first place.
I think we're behind the eight ball here.
mongoose704 1 year ago
@mongoose704
No, no, the pain and suffering is when we're under the thumb of a gov't, the collapse is the correction. I love recessions for the same reason--they're corrections! We must purge all toxic elements. Crises can only lead to more gov't so long as the governed are weak and immoral. The Soviet Union had a crisis and collapses. Many ex-bloc countries are much freer today. If Texas secedes, count me as a future Texan.
selfrealizedexile 1 year ago
@selfrealizedexile
Thanks, I needed to read that. Just because I was thinking for a moment that more government was inevitable doesn't mean I desired it. I can at least hope that we will turn to freedom in response to the coming crisis.
mongoose704 1 year ago
@mongoose704
As I said, abritrary stabilization (gov't) is actually the "chaos." What could you possibly desire from such an entity that by definition brings that to the table?
selfrealizedexile 1 year ago
@selfrealizedexile
Really?
China has pegged their currency to the US dollar, which FORCES them to buy US dollar assets to maintain the peg. China has used their slave labor and forced savings to become the manufacturing center for the entire world. This has allowed them to modernize their country.
What did we get? We got cheap goods and fewer jobs. We hid the job loss from outsourcing with the DotCom and Housing Bubbles. The real economy is now exposed and so is the damage.
666sigma 5 months ago
@selfrealizedexile
Once we lose our liberties, we will pay hell to get them back.
Usually it takes revolution to get freedom back.
Government is the problem, I agree.
mongoose704 1 year ago
@mongoose704
We already lost them.
selfrealizedexile 1 year ago
OH, SAVE ME, GOV'T, SAVE ME!!
Surely, you won't steal the wealth for yourself and leave me bread crumbs after taking it from the producers of society. Surely not!
[Wake the fuck up, bleeding hearts.]
selfrealizedexile 1 year ago
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Just simple speculation that the Fed will tighten monetary policy sent the markets into a two day plunge. That alone should indicate how much of this recovery is merely inflationary expansion created by monetary policy. The same monetary and credit expansion which led to countless crisises, bubbles and collapses in the 20th century.
The recovery is phony and will collapse. I fear the severity of the crisis when our current bubble bursts
mongoose704 1 year ago
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mongoose704 1 year ago
However economists are correct to be concerned about upcoming inflation but looking at the numbers taxes are almosty irrelevant because the amount of stimulus coming from The Fed dwarfs tax revenue (it could max out at 23 trillion dollars.) That's the reason there is so much talk about when the Fed will raise rates is fear of monetary inflation.
mongoose704 1 year ago
I definitely agree that credit redistributes income from the poor and middle class to the ultra wealthy but how does inflation do that? (That's a real question, not a challenge).
And I might mention that getting laws passed to help them outsource our jobs to India and China is another way they transfer our income into their pockets.
Skydancer365 1 year ago
@Skydancer365 You can find some writings on the mises website. The work of John Keynes also mentions the effect of inflation on redistribution of income and wiki has a direct quote from him about it. Happy researching! I'm not sure I can explain it in 500 words.
mongoose704 1 year ago
@mongoose704
Well, you could try! :)
Skydancer365 1 year ago
Nordstroms is doing well... Mercedes dealerships... you know... the places Krugman shops. What??
McDonalds and WalMart are gone? Oh well... I guess it's a rich man's game.
ParrhesiaJoe 1 year ago
Inflation is why the rich get richer. Marx, Adam Smith, Lenin, Hayek and even JOHN KEYNES all agreed that inflation leads to the redistribution of wealth from the poor and middle class to the rich.
Why can't Krugman see that his HERO, John Keynes, said it was inflation? He STILL supports government mandated, centrally planned inflation. He is still playing the class warfare card.
Krugman is a fool that supported everything that caused this meltdown in the first place.
mongoose704 1 year ago
Over 5 million Americans who are poor today, were not in 2000. The number of families in poverty has increased by 19 percent since 2000. As the bottom half of American workers saw their share of national income decline, the wealthiest 1 percent saw a huge increase in their overall share. The wealth in America is now more concentrated than it has ever been before in our lifetimes. That's why conditions are so miserable for working Americans in this country!
CosmicFork 1 year ago
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mongoose704 1 year ago
@CosmicFork According to accurate formulas that represent inflation, we saw 9% year over year inflation up until 2008.
Monetary policy also contributes to inflation and the phenomenon of large wealth concentration.
I see a lot of differing understandings of the current situation today but I am assured by the fact that I see nobody who thinks this system of partnership between big business and government can do any good.
What about the rise in the number of WORKING POOR?
mongoose704 1 year ago
Yeah, Krugman supports bailouts and deficit spending and fiat currency devaluation.. he pretends to be a socialist, but he proposes policies that just take from peoples liberty and steals their savings. its socialist economist like krugman that actually make the gap between rich and poor even larger! how ironic mr. krugman
astro7894 1 year ago
Hey, Paul - ya think this polarization stuff might have something to do with bailout plans that you support?
kolegamikolaja 1 year ago
The wealth in America is more concentrated than ever before in our lifetimes. The workers have been stripped of all power, and are treated like disposable units of labor, while Corporate CEO's are rewarded in a manner beyond imagining. But, it is in the interests of the wealthy, to keep workers unemployed and hungry. The rich are too polite to say it aloud, but they know that poverty rocks for them. Poverty is profitable for them. Poverty makes their stocks go up, and labor costs go down!
CosmicFork 2 years ago
@CosmicFork
I'm guessing you have no formal education in economics.
SuaveSavant 2 years ago
@SuaveSavant
I'm KNOWING from your Channel Page that you're a smart-ass, 22 year old Punk, I don't feel like wasting my time dealing with... So, Fuck-Off!
CosmicFork 2 years ago
@CosmicFork
Enough time to give me 2-3 clauses, but not a yes or no answer to my question.
Yes, I'm 22. Idk about the punk part...? lol, I'm a perfectly mature, frank, and educated man. Your *theory* about the rich was utterly pathetic. You have no evidence to support your claim empirically not to mention it's easily made foolish in the theoretical realm.
If you're so sure of yourself, why are you isolationary? It sounds like you just want to rant and someone called you on it.
SuaveSavant 2 years ago
So, the rich people, like Bill Gates perhaps, WANT people to be poor and NOT be able to afford the things he manufactures? Might wanna rethink that and come back later. cowboy.
voodooshizzle 1 year ago
So, the rich people, like Bill Gates perhaps, WANT people to be rich and NOT need to get a job producing the things he manufactures? Might wanna rethink that and come back later. voodooshizzle.
jeremyemilio 1 year ago
How is it juvenile?
return135 2 years ago
"Free market" compared to what? To Australia? Finland? Mexico? Markets are totally free only when no government exists, and in any democratic society there is going to be a relationship between government and the tension between consumers and private businesses.
SweatLaserXP 2 years ago
A complete free market is absurd.
MaxwellBennett 2 years ago
fuck off
swingdocta 2 years ago
are you replying to me? because the answer is yes. I'm a fourth year student who has studied quenay (spelling?) adam smith, john maynard keynes, thorstein veblen a little bit of milton friedman. Currently I'm studying the evolution of economic thought which surprisingly includes john locke. So i have my opinions, and if your criticising that last post, it was a reply to the concept of a privatized policing force and fire dept.
lpelina31 2 years ago
you should read up on the austrian school. they're the only ones who've got it right
rcdny 2 years ago
I actually am going to read up on the austrian school after graduation. I like how they don't rely too heavily on economic models of unreal worlds of perfect competition. But I would be very hesitant to say any school of economics is "right" regardless if they're classicals, neo-classicals, marxists, keynsians, physiocrats, or austrians. Assuming that ONE approach to economics applies to EVERY situation would be a mistake. It's like saying only 1 management style is effective for everyone.
lpelina31 2 years ago
The Austrian school is not right when it comes to their unwavering support for the 100% gold standard. The gold standard has too many downfalls. I strongly support abolishing the Fed, but returning to the gold standard would be silly. I'm more in line with The Chicago School and Milton Friedman than the Austrian School with Rothbard and Mises.
Americaisgreat123 2 years ago
Can you explain why you are for an inflatable currency? Remember, when you inflate a currency, only the political insiders get this money first, and spend it, before prices rise. There is a reason why the top economists have always preferred a commodity standard. And Milton Friedman has had many shortfalls and this was one of them. He argued with Mises that the price of Gold would drop below 35 dollars when the link to the dollar was removed in 71, whereas MIses said it would rise to double in..
vshagoyan 2 years ago
no time. Guess who was right.......
Its not a gold standard per se, it is about a commodity standard, but most importantly it is about a lack of embezzlement, aka fractional banking, which is the real problem. Its not just the Austrians that advocate a gold standard . Gold is honest money, paper is not. John Forbes Nash came out recently and said he was in favor of a gold standard. Joseph Schumpeter, arguably one of the best economists of our day also advocates the same. Same with forbes.
vshagoyan 2 years ago
Just because I think a metallic standard is too ignorant for modern times and not ideal, doesn't mean that I support inflation. Do you support deflation? That is what happened under the gold standard in the US and Britain during the industrial revolution. Tying output to gold had too many downfalls, this just being the first of many.
If I had to choose between our current situation and the gold standard, I'd choose the gold standard in a second.
Americaisgreat123 2 years ago
Yes deflation is a good thing. In fact its a great thing. , We see deflation in certain sectors of the economy all the time. Do you think the deflation we see in computers and other electronics is a bad thing. Deflation is a good sign because this means that our productivity has increased. The only time deflation is bad, that is when people might hoard because of it, is during recessions which are results of a lack of a strict 100% gold standard. By 100% I mean full fractional banking.
vshagoyan 2 years ago
For all its problems, Gold is still the best medium of exchange. It is the most honest, and the safest.
vshagoyan 2 years ago
I disagree that it is THE best medium of exchange, but do agree that it is the most honest and safe.
First and foremost, if well thinking economists and concerns citizens don't defeat this blow hart (Krugman), we will continue down the road to hell, paved with good intentions.
Americaisgreat123 2 years ago
What exactly would you suggest then?
vshagoyan 2 years ago
Who do think will be buyin all these imsolvent homes, the rich. If you cannot play in the fiscal arena as the opulent then you are merely screwed and are at the merci of them. This financial crisis is the perfect setting for rich to get richer.
Mediterraneanblue9 2 years ago
Mediterraneanblue9, you wrote: "This financial crisis is the perfect setting for rich to get richer." Yep. The power-elite know what has true value and what doesn't; and they're buying up assets-- for pennies on the dollar-- which others have cast off in a panic to get out of what they see as a sinking ship in a storm. Well, the ship might be sinking, but there's gold, silver & precious gems in the hule, and the power-elite have secured sole diving rights to go get it when the sea gets calmer.
FriedDaisy 2 years ago 2
People keep talking about "class warfare" as if it's a bad thing. IMHO, we NEED some class warfare right now.
Conservatives and Libertarians talk about progressive taxation as if it's stealing from the rich, but I prefer to look at it slightly differently. If they're making billions of dollars, it's because they aren't paying us the wages we deserve or they've helped rig the economy so that we're not (or both). So they're STEALING OUR LABOR! So, yes, we'll steal some of it back!
Skydancer365 3 years ago
That isn't how it works. Wealth is not a zero some game. Your post implies that there is a set amount of wealth, and that when one gets more, another gets less. This couldn't be further from the truth. Free market competition is what brings about and maintains quality, not government regulation, and redistribution of wealth.
TimeWarp66 3 years ago
Well, that's one economic opinion amongst Nobel Laureates. One that I used to believe in, but since the economic collapse I don't believe in anymore
Plus, I don't believe that the concept of a "zero sum" game has anything to do with competition (which I strongly believe in....I just believe it needs restrictions).
Skydancer365 3 years ago
Restrictions are what cause monopolies an economic stagflation. Laisseiz-faire 4 life folks.
TimeWarp66 3 years ago
Yes, well, that's one theory. A theory that conveniently favors the opulent Republican not-really-conservatives. A theory I used to believe in, but don't anymore.
Skydancer365 3 years ago 3
Another thing to consider is that even if it isn't a "zero sum" game, increased income inequality gives the opulent more power to "game the system". To twist and pervert it in their favor. Which they have done.
Skydancer365 3 years ago
how does income inequality have anything to do with manipulating the market place, or "gaming the system" as you call it? How would it be more difficult to "game the system" if income inequality were lessened?
TimeWarp66 3 years ago
Many ways. One is that the opulent have more money to pay to politicians to pass laws and policies in their favor. Another way is that they create bubbles by infusing their wealth into the economic markets (and even creating new markets), then, when the bubble begins, the middle class jump onto the bandwagon (401ks), but the opulent, being more financially astute, pull out & put their money in other markets at the top of the bubble, the bubble collapses, sucking wealth out of the middle class.
Skydancer365 3 years ago 3
You don't think there are opulent in western europe, and other places with less income inequality have rich people who are capable of bribing politicians? In a truly free maket, there would be a constitutional amendment separating private sector and the state. And the wealthy do not create bubbles lol. The FED does. Listen to some Ron Paul, and Milton Friedman videos here on youtube. You're become a Libertarian in no time ; )
TimeWarp66 3 years ago
Umm, I read Milton Friedman a long time ago and voted for Ron Paul in 1988. I have since been convinced that the Libertarian ideologies are wrong.
The Fed helps the opulent to create bubbles with favorable legislation but the opulent gives the Fed the power to do it.
Skydancer365 3 years ago 2
That confirms Libertarian ideology. It's government collusion with the private sector, that is not a free market.
TimeWarp66 3 years ago
Well, the reason I gave up being a Libertarian is because I was convinced that it's a fantasy. I no longer believe it can work. I believe, If the power of the government doesn't balance the power of corps, then one, or a few, giant corps eventually rise to the top of the heap and I don't believe the market place has the ability to stop it. Corps essentially BECOME the gvt and become too big to fail so we have to have corporate socialism to bail them out.
Skydancer365 3 years ago
Skydancer365: I have read all your post here, & totally agree with you. I spent the past year listening intently to Ron Paul & his ideas about the rule of law & free markets. I was also listening to & watching the behavior of the Neo-cons, the corporate talking heads that kept showing up on CNN & the Republican base , and I came to the conclusion that no market will ever be fair & free because human beings are by nature greedy hoarding beasts who can not be trusted to regulate themselves.
FriedDaisy 3 years ago
Humans are not greedy, hoarding beasts by nature. They are made that way when resources become scarce.
You should come to Miami when there is a hurricane. You'd be surprised how cool people are when the shit hits the fan.
zcomecuca 3 years ago
If it takes scarcity to make humans greedy, hoarding beasts, then how do you explain the behavior of the power elite?
Resources are not as scarce as they would like us to think. They are manipulated. If there's supposed to be a food shortage, why do they pay farmers not to farm. If there's a fuel shortage & global warming, why do they patent & hide away technologies which will free the world from its dependence on filthy oil, gas & coal?
The answer is: men are greedy, hoarding beasts.
FriedDaisy 3 years ago
lol... you don't have a clue on how a free market works. Free markets can self regulate as long as governments do not interfere with them. Your blaming capitalism for the problems government has created.
return135 2 years ago
return135: you would be right about the ability of a free market to self regulate without government intervention if we were dealing with the garden variety businesses of the past, but were not. The system is corrupt. Massive global corporations have wheedled their way into governments and seized control of things that private for-profit organizations never should have been allowed to meddle with. Corporations interfere with the markets in exactly the way you say valid governments shouldn't.
FriedDaisy 2 years ago
Yes, the markets are corrupted. Governments have become far too involved in the markets because they have not followed the constitution. If the government could just not interfere with the economy things would not be corrupted because businesses would be forced to provide products consumers want instead of lobbying congress. Also, anti-trust laws were intended to prevent monopolies but they do the opposite. They allow big business to set the rules in their favor which destroys small businesses.
return135 2 years ago
I realize I'm a little late for this argument but I have a point to make. The market does have the ability to self-regulate in the LONG-RUN, however most people can't wait that long. And if the public sector is so disastrous, why don't we privatize fire depts, police depts, and the military. I'm sure someone such as yourself would be happy to agree to a bill from the fire dept for putting out the fire in your house right?
lpelina31 2 years ago
Well if you asked the great historian/economist Murray Rothbard all those things you mentioned including roads could be privatized and work very efficiently and even better. Also, you already do pay for all those things in taxes. Ex) take the fire dept, you might have some sort of insurance that you could buy, while the companies compete for the consumers by lowering their costs, unlike the socialized fire dept.
return135 2 years ago
Sorry about the sarcasm, but in truth the market has been given placed on this godly pedestal by mainstream economics , but even Adam Smith was distrustful of businessmen or in his words from the wealth of nations, the "master class" and felt that govt intervention was necessary when dealing with them. Though to be fair he doesn't elaborate much on how we should deal with them, but leaves it up to society to find that plan.
lpelina31 2 years ago
Businesses are regulated by their consumers/shareholders/profit and loss, and fraud laws. not by some sec bureaucrat. Govt intervention, by regulation/taxes etc... distort markets, make it inefficient, and make people poorer. Also, i don't think people give enough respect to the free market.
return135 2 years ago
Your argument is true only in the setting of a perfectly competitive environment, which doesn't and will never ever exist. Remember in California when lobbyists got their way and cali deregulated the power companies (Enron)? These private companies restricted output, raised prices, and basically "raped" cali and put us into a debt that we never got out of. How then if govt regulation was a problem, did we not achieve efficiency when legislation deregulated?
lpelina31 2 years ago
Enron was a case of fraud which was not caused by a "deregulation", and it was taken care of through state fraud laws. Listen, a lot of these problems when you look into them it is often a case of government getting involved with the different companies making inside deals, not laissez-faire capitalism.
return135 2 years ago
When I talk about Enron, I'm not talking about their accounting fraud, I'm talking about their legal (cuz of deregulation) business practices. They would close their power plants and restrict supply to create rolling blackouts (I lived thru it), and drive up the prices. Acting exactly as monopolistic company would do! They then auctioned off energy to the highest bidder. Cali stupidly agreed to deregulation on the basis that it would bring about competition and cheaper prices.
lpelina31 2 years ago
My guess is that it was not "deregulation" but rather it was some sort govt law damaging their competition or the govt gave powers to enron that a regular business wouldnt have(which wouldnt necessarily be dergulation). I would have to look into that situation because there is probably more to the story than just simple deregulation.
return135 2 years ago
I'm not saying that the free market will never work, but that the reality is that there are times when it can fail. Now I'm not a pro-govt kind of guy, really i'm not, but there are some situations that call for govt intervention. I don't wana have to worry about insurance when my house is on fire, i just want the fire dept to put the fire out for me and Im willing to pay taxes for that. I want the police dept to arrest whoever robbed me without having to pay a bill first, see my point?
lpelina31 2 years ago
Obviously the free market is not perfect, humans make mistakes. However, it is the best system out there. My goal is to have a voluntary society where there is no government coercion. Also, if the govt stop providing fire/police it would not be the end of the world, other companies would come in and do a better job. A hampered market economy,which you desire, is not the best option. A free market may not exist now but the closer society is to it the better off everyone is.
return135 2 years ago
Laissez fair is what led to and perpetuated a depression during the 1930's. ya know... thousands of bank failures and a credit freeze. Also, I don't mean to sound cynical, but I highly doubt that a private company motivated by "profits" would do a better job of arresting a criminal than a state trooper. In fact, I would assume that a private company would perform crimes so that they could get paid to stop the crime. Ya know, extortion, which is closely associated to organized crime.
lpelina31 2 years ago
you have just perpetuated a huge myth on the great depression. You should read murray rothbards book on america's great depression or there are some great videos at the youtube channel misesmedia on the GD. The Private company would get paid on results so they would be more motivated. Also, they wouldnt perform crimes b/c it would damage their business reputation and its would be against the law! you could take them to court. State police focus on trivial things like drugs and giving tickets
return135 2 years ago
Forgive me for believing that a private company would ever break the law for profits. All those stories about mechanics taking advantage of customers, doctors abusing health insurances, peanut producing companies shipping out contaminated products, cigarette companies hiring fake scientists, etc... it's all just a myth right? I mean why would they even think about breaking the law for profits....
lpelina31 2 years ago
why are you so paranoid?
swingdocta 2 years ago
Because the big bad government is out to destroy the world through socialism AND fascism, and Barack Obama is a racist christian/muslim terrorist who wasn't even born in the U.S. because he still hasn't showed us his birth certificate and he's going to raise taxes (to a rate that is still below Ronald Reagan's rate), and Foxnews and Glenn Beck are my heros. That's why I'm paranoid. **PLEASE SENSE THE SARCASM**
lpelina31 2 years ago
no really you are paranoid. we saw your fear of car mechanics and bankers. are you an anti-Semite too?
swingdocta 2 years ago
You're an idiot to make baseless claims like that. Or you're some retarded high school kid thinking he understands economics because you took one or two courses or lectures. Tell me where I said I was scared of bankers. I AM a banker. Tell me where I said I was anti-semetic. Tell me if you understand why I said some mechanics are corrupt. Do you even know the difference between the public and private sector? You don't belong in this conversation, and I'm not going to respond to you anymore.
lpelina31 2 years ago
wow you are real jizz bucket. you claimed the great depression was caused by a credit freeze, and those greedy bankers on wall street. a common scapegoat among shallow minds to blame the worlds problems on a few greedy people. you made a bizzare claim of mechanics being an example of market failure. of course i understand economics more than you seeing you dont know shit.
swingdocta 2 years ago
i do sense economic ignorance. economic decisions are made on the margin. tax rates at time t0 are not same as tax rates at time t1. going to a higher tax rate, especially in this environment is destructive. Reagan lowered tax to a certain level he didnt raise them.
rcdny 2 years ago
While it's true that a higher tax rate in this environment could hinder growth, my satirical rant above was more based on right wing paranoia. Obama hasn't raised the tax rate, he's letting them expire in two years. Now as for the argument to lower taxes, i recall last year when 350 billion was given back to consumers and still failed to halt or slowdown our recession. I've yet to see any empirical evidence that show tax cuts are the most effective fiscal policies.
lpelina31 2 years ago
1. A tax rebate is not a tax cut. A rebate is temporary, so people who need money save it.
2. the reagan tax cuts (personal and corp) should provide enough empirical evidence. those tax cuts were responsible for 2 decades of growth.
3. you must first produce before you can spend. production comes from savings. relying on spending is just a lot of keynesian nonsense
rcdny 2 years ago
If people were to save, laze-faire economics say that interest rates would be lowered, & induce investment. However banks are hesitant about lending in this type of economic environment (rightly so). And the Reagan tax cuts being responsible for 2 decades of growth is debatable. Remember after FDR's new deal there was 3 decades of economic growth?Again that's debateable. I'd say that Reagan was responsible for fixing the Fed's unstable lags which is the cause of stagflation during that decade.
lpelina31 2 years ago
banks are hesitant about lending because there are no real savings. no real economic wealth so credit fears are high. interest rates are artificially low. w/o the fed, int rates would be much higher to reflect the scarcity of savings to lend. there is no debate otherwise you would be able to offer another reason for prosperity. if fdr's new deal worked then why did the depression last so long? why did we only recover after ww2.
stagflation refutes keynesianism.
rcdny 2 years ago
u can't have it both ways & say that people saved their tax rebates but that theres no real savings. stagflation is simply a product of incorrect usage of keynsian policy, not accounting for lags. as i said, it's debatable as to how effective the new deal was (even keynes himself said it would not be as effective), but since WWII forced the U.S. into keynesian fiscal policies, unemployment dropped to 2% and thats why the depression ended. Because demand increased & businesses responded.
lpelina31 2 years ago
a one time tax rebate cannot does not set a trend for savings. consistent tax savings are needed.
since whn does war=prosperity. ppl worked long hours and goods were rationed. doesnt sound like economic prosperity to me. prosperity began AFTER the war. GDP and unemplymnt gets skewed when there is govt intervention. the govt can hire all wrkers & pay anythng they like for goods to raise GDP. their demands are not consistent with society's needs so the "prosperity" we see in the #s are misleading
rcdny 2 years ago
So 350 billion just leaked out of the system over night?! U either spend or u save, nothing else u can do with money. U just said people 'SAVED' their rebates, where did the $ go? WWII forced the government to put people to work, which gave them $ to spend and let the ripple effect stimulate growth! It was a prime example of Keynsian economics. If it could work in war-time, why can't it work in peace time. It is consistent w societies needs because its people purchasing that cause prosperity!
lpelina31 2 years ago
350B~3% of GDP. where would you see it show up? that's my point it didnt. the so called multiplier is a myth. we must first produce before we consume.
ppl must spend to clear inventory but we wont revive the economy until prices drop sufficiently. currently we are trying to reflate the economy. it wont work.
again what growth are you talking about? the govt could spend a billion dollars on a hammer. the gdp then increases by 1B. is that prosperity. ww2 was not prosperity.
rcdny 2 years ago
3% of gdp is a lot, don't belittle that amount. In fact if GDP were to grow by that amount, we would say our economy is strong. & this 'Say's law' argument u keep repeating, it's incomplete. Production motivation is a function of supply AND demand. & the growth I'm talking about is the consumer spending. Gov't isn't to buy hammers & whatnot, it's to put people to work, giving them income to put back into the economy. That's why the market is still reflective of society, people are purchasing!
lpelina31 2 years ago
Do you actually think Keynesian economics is viable? Or real for that matter?
2012Ronpaul2012 2 years ago
In this exact situation, I do think it's viable. As far as it being real? I think it's just as real as all of the other economic philosophies... in other words it's just a theory, like the rest of them. Ron Paul huh? Must be an Austrian. He's a smart guy, I'd probably have voted for him over McCain. At least he doesn't hate econ and thinks in depth about things.
lpelina31 2 years ago
Yes I am an Austrian, and Keynesianism is a bunch of fallacies. It's so bad, I dont know where to start. And this instance is probably the worst instance we can be using it. You need to do some research on the depression of 21 to see what NEEDS to be done during a recession. Keynesianism is what causes recessions to become depressions. If you have time, read "the failure of new economics" by Henry Hazlitt, and you will never look at Keynesianism the same way.
vshagoyan 2 years ago
There are two sides to every story. You can sit there and claim that Keynsianism is what causes boom & bust cycles. I can sit here and say that boom/bust cycles are a result of the free market endogenously. Remember that the theoretical economic world you think of doesn't and will never exist. No offense intended (I mean this), but I'd be more interested in your opinion if it was backed up by empirical evidence, not just theory.
lpelina31 2 years ago
Heres just one little problem.
Keynes derives his formula for gdp as
C+I+G+(n-x) * MUltiplier, whereas the multiplier is (1/1-mpc).. If total spending is 1000 by the economy, and people consume 90% of income, our gdp is therefore 10,000 because of the multiplier of 10. Fair enough. Now if we consume 95% of income our GDP rises to 20,000. If we consume 99% of our income, GDP rises to 100,000k, if we consume 99.9% our GDP rises to 1 million! 99.99% MPC raises GDP to 2 million. Ad infinitum.
vshagoyan 2 years ago
The U.S. MPC has always empirically been around 90%. This formula does not assume that consumers hoard. It assumes savings, which is a leakage to be plugged by investment. Have you heard of an IS or IS/LM curve? He does not recommend war, but the war was viewed as an example of Keysnian fiscal policies. Have you ever studied anything other than Austrian economics? I"m so sick of these false accusations. How about learning about something before you have an opinion of it.
lpelina31 2 years ago
Actually you havent read the General theory. In Page 118 he says that building pyramids or wars will create wealth. YOu need to read Keynes before saying false accusations. What is your point about the MPC being 90%, my point is that there is no empirical evidence on Keynes Multiplier effect. ZERO. And do you realize what the multiplier effect suggests? It tells us that we can technically have an income of infinity. (yes I know 1/0 is undefined, but you get my point). I got my degree in econ...
vshagoyan 2 years ago
The MPC being 90% is what's real in america, why try to take it to 99.99% when it's not reality. It's an explanation of our purchasing behavior. I'm also getting my degree in econ. Now I'm not a Keynsian per se, but I will defend him from false accusations.
lpelina31 2 years ago