Ron Paul discusses Austrian vs. Keynesian economics on Morning Joe 05/15/2009

@nuclearcollision

Amazing, thank you.

I think the misunderstanding w/ liberals is they think libertarians are cold hearted. Liberals just think we should give everything to everyone not realizing you have to steal it from others to do so. With true free markets there would be so much prosperity that everyone would have all there needs met & the goals of liberals would be met. It's just we have to find a system that allows us to get there & socialism always fails.

I don't think Austrian economics goes far enough, but it's the best starting point. I also noticed that proponents of that school are generally not only extremely intelligent but good at heart. For the sake of our children, Keynesian economics needs to be exposed for the fraud it is.

@europarl
Yeah ok.

@supermurder67 increase aggregate demand, government must increase spending. However, in order to spend, the government needs to get money from taxes. Thus, they reduce the ability of people to spend, and they therefore reduce demand. Taking money out of the system and putting it back slowly, only serves to slow down economic recovery.

@Psychosmurf547

Well, that is called balance budget. You have to operate on a budget deficeit in order for the spending multiplier to work. If you increase taxes the multiplier will be canceled out. For example say current economy has an mpc of.90, which would make the spending multiplier of 10 and they put in 5 billion. 5 x 10 = 50. If you operate on a budget deficit this works.

@Psychosmurf547
Say you increase taxes as well. the TM = 1/1-10 = -9 So 5 x -9 = -45. 50 +(-45)= 5. Increasing taxes eliminates the multiplier.

@supermurder67 Wouldn't a better way of bringing the economy to full employment be to increase the level of education? Government spending MIGHT work, but it is only a short term solution.

@Psychosmurf547

Yeah, it would be a start. Most towns are suffering budget cuts. What they should do is increase the budgets of towns and cities across the country. Cutting jobs in the public sector is only going to make it worse.

@supermurder67 I disagree completely. In times when unemployment rates are high, the groups of people with the highest rate of unemployment are those who have the least amount of eduction. The unemployment problem is not caused by low demand-> low profits-> less workers. What really happens is that employers can't borrow money because of banking troubles, and they no longer see any value in paying low skill laborers minimum wage. Keynesiam economics does not address any of this. It says that to