The KGB Oracle Forums General Public Discussion (SPECIAL ACCESS) KGB Political Debate Central Real cost of partisanship

No, Keynesian economics revolves around the basic concept that depressions and recessions are a demand problem.

Thats what "stimulus" tries to address.

Now, it is technically possible to do a "stimulus" without being Keynesian per se... but that isnt the case in modern economics which has been dominated by Keynesian thinking. The "non-Keynesian" type of stimulus is basically boiled down to "times are tough so I am going to hand money to my allies". Maybe this is what you are referring to?

Either way, its justified by Keynesian thinking - the claims are that it will help the economy.

Keynesian economics revolves around the basic concept of the "demand problem" - that is, that there is insufficient demand. To combat this, Keynes recommended two courses of action.

1) Tax those that "have", and redistribute to those that do not. This is to "free up" idle capital and inject it back into the market.

2) Run deficit spending, to put money in the hands of those who do not have it - and thus "create" capital , and increase aggregate demand.


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Please, tell me how our stimulus efforts are not Keynesian and how I am stretching the word. Because I am not, I actually know exactly what I am talking about when it comes to economics.

Austerity is not necessarily the best policy in "all" crisis situations. Because "all" is a pretty encompassing word.

I realize you are trying to make a comparison between the GreatD and 2008-now.

What I was pointing out to you earlier in the euro example, is what happens when the deficit spending tactic to keep demand up finally runs its course... people stop loaning you money. That is why Germany was the source of all that hubbabalooo - everyone was wanting Germany to keep bailing out the failed Eurozone countries... which would basically require Germany to embrace the same types of deficit spending policies.. and Germany has understandably been giving them the finger. Because what is the point, if the people you are bailing out refuse to get their heads on straight? As soon as Germany ruined itself , then they would all be hosed.

So Germany said "no cash for you, unless you adhere to a budget that is actually reasonable" which was massive austerity compared to the prior bouts of spending. The resulting pain induced is not because "austerity" isnt needed, but rather illuminates how unsustainable the previous spending was. In simple terms, its what happens when a normal guy makes 30k a year and puts 60k a year on his credit cards. Eventually... his credit dries up/becomes to expensive to sustain... except where an individual would just declare bankruptcy a country typically wants to avoid that at all costs.

The Euro zone is our ultimate fate if we continue with our current policies.


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Now, talking about no bailouts = lights out @ banking system.

This is really pretty inaccurate. There were actually plenty of healthy banks... even though the Govt tries very hard to makes banks unhealthy. ( See things like EHL / HUD /etc regulations )Also, many people think that the default swaps would have worked just fine had they been allowed to take their course.

I am really not sure what basis you have for saying that we would have faced 50% unemployment and no banking industry without bailouts. Sure, thats what the bailoutees claimed... but I hardly feel inclined to take *their* word for it.

There are plenty of well thought out rebuttals of that assertion out there. Maybe you will get interested to read some of them.

So his election results do not count but the ones that favor your argument are the only valid ones we should agree with?

What you say is not exactly wrong, but main point of Keynesians is that economic return on $1 of spending could be more than $1 (concept:spending multiplier). According to Keynesian thinking you should be able to get out of recession only with stimulus and never run out of money. This coincidentally increases %GDP of government spending, but this isn't the main point but rather side-effect.

You can have stimulus without subscribing to this ideology, typically with infrastructure spending.

Actually that is not so much the main point, but rather exogenous spending changes are a mechanic by which Keynesian types seek to increase demand.

Supply-side economics also uses this concept, but in terms of tax cuts rather than spending increases. I consider the mechanic faulty , and attempts to manipulate it as one of several primary causes of malinvestment - that is, misplacing resources.(which is a prime driver of bubble economies... which are incedentally caused by inflationary and stimulative monetary and fiscal policies). I also think that Keynesians have a poor understanding of the effects of interventionist spending in a global economy and also frequently mistake capital flow with wealth creation. But I digress.

But anyhow - govt spending is the mechanism by which Keynesians frequently like to attempt to influence the multiplier, simply because it is an easy lever to pull via centralized control. But the purpose of pulling this lever, is still to address the Keynsian concept of the "demand problem".

filibusters - http://www.theatlantic.com/politics/arch...cuments/261645/

This is not the case way I understand history. Feel free to correct me with factual links.

"I find no fault with the ideals I follow. I find nothing but fault with ideals of others that do not agree with me. I will attack the ideals of anyone I feel is against my ideals wither I have proff of it or not. If proff is offered that proves me wrong I will ignore it, deflect, and counter attack."

So Red, what do you think about Ryan's voting record on fiscal issues? What about Ryan's plan deficit spending plan? Oh, I forgot "you built it!" this fiscal crisis and deficit spending with 8 years of GOP presidency and your poster boy Ryan cheering for every unfunded tax cut and deficit spending program. He even sponsored some.

I'm sure he will do better this time, simply because its damn hard to top such massive clusterfuck again.

"I find no fault with the ideals I follow. I find nothing but fault with ideals of others that do not agree with me. I will attack the ideals of anyone I feel is against my ideals wither I have proff of it or not. If proff is offered that proves me wrong I will ignore it, deflect, and counter attack."

More spam? Is that the depth of your intellectual curiosity?