View Poll Results: Do you support Keynesian economics?

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Thread: Do you support Keynesian economics?

  1. #51
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by cpwill View Post

    Andrew Mountford (of the University of London) and Harald Uhlig (of the University of Chicago) have used sophisticated statistical techniques that try to capture the complicated relationships among economic variables over time; they conclude that a "deficit-financed tax cut is the best fiscal policy to stimulate the economy." In particular, they report that tax cuts are about four times as potent as increases in government spending.

    Perhaps the most compelling research on this subject is a very recent study by my colleagues Alberto Alesina and Silvia Ardagna at Harvard. They used data from the Organization for Economic Cooperation and Development to identify every major fiscal stimulus adopted by the 30 OECD countries between 1970 and 2007. Alesina and Ardagna then separated those plans that were in fact followed by robust economic growth from those that were not, and compared their characteristics. They found that the stimulus packages that appeared to be successful had cut business and income taxes, while those that evidently did not succeed had increased government spending and transfer payments....
    Of those countries, how much of their economy was invested into the American economy?

    Quote Originally Posted by cpwill View Post
    3. the economy will collapse further as the price of goods spikes - with the poor taking the brunt of the hit. we will start to see large job losses, the market will plunge, and growth will disappear.

    trade wars are wars that governments wage on their own people.
    As opposed to the alternative, which is reducing labor regulations and industry wages as low as what is paid in other countries - with the poor taking the brunt of the hit. We will see increases in employment but reduction in the quality of life for those wage earners which will add more pressure to our health care system and possibly to an increase in crime as low wage earners either commit crimes to increase their economic lot in life or as they rely more on illegal drugs to cope with the stresses of working long hard hours for little pay.

    One way or the other someone's going to get the **** end of the stick. And if you notice my idea is only a trade war against those nations who treat their citizenry in an abusive way - no trade wars will happen with those nations who treat their laborers fairly and humanely. Therefore, the global trade of goods will still flow, brunting the negative impacts you mentioned.
    Also, we need to legalize recreational drugs and prostitution.

  2. #52
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by samsmart View Post
    Of those countries, how much of their economy was invested into the American economy?
    what?

    trade and mutual investment between the industrialized nations is far and away larger than trade between industrialized and non industrialized nations.

    not really sure how that in any way counters the fact that when you study their history of attempts to stimulate their economy, the attempts that are built on the notion of increasing government expenditures are the ones that fail.... just like ours currently is....

    As opposed to the alternative, which is reducing labor regulations and industry wages as low as what is paid in other countries - with the poor taking the brunt of the hit. We will see increases in employment but reduction in the quality of life for those wage earners which will add more pressure to our health care system and possibly to an increase in crime as low wage earners either commit crimes to increase their economic lot in life or as they rely more on illegal drugs to cope with the stresses of working long hard hours for little pay.
    1. the vast majority of workers in America earn above the minimum wage - and the vast majority of minimum wage earners are entering the workforce, and don't stay there. that is because their labor is worth more. If the government were to completely get rid of the minimum wage tomorrow; with the exception of a few marginal people currently making minimum, people wouldn't see their paychecks drop. so the notion that the government can "lower industry wages" is a non-starter.

    another issue is whether or not wages are the measurement you should be using. they are not - for the simple reason that wages are not the cost of employment. wages versus production is the cost of employment. If I hire a Somali kid at $1 and hour and he makes me $5 an hour worth of production, then he is actually more expensive than the American I hire at $10 an hour who makes me $75 an hour worth of production. That measure is actually already tipping back in our favor:

    ...Wham-O Inc., brought 50 percent of its production back to the United States last year. Wham-O is just the first sign of a developing trend, as firms such as NCR, General Electric, and Caterpillar are bringing jobs home from China. Moreover, many other firms are opting to expand production in the United States, rather than build new facilities in China.

    According to a new report from the Boston Consulting Group (BCG), rising manufacturing costs in China are reducing that country’s allure as a location for transplanted American industry. Average Chinese wages remain only 31 percent of what American workers earn, but that figure is expected to rise to 44 percent by 2015. Moreover, the more expensive workers along coastal China will close the gap to an estimated 69 percent by mid-decade. And although Chinese labor remains much cheaper than American labor, it is also less productive. According to BCG senior partner Harold L. Sirkin, once productivity is factored in, Chinese and American labor costs will converge by 2015...
    but you are absolutely 100% correct that we need to reduce regulation.

    Lafayette College economists Mark and Nicole Crain have estimated that Americans were spending more than $1.7 trillion annually just to comply with federal regulations—and that was before Mr. Obama took office.

    The best measure of the overall regulatory burden comes from Wayne Crews of the Competitive Enterprise Institute in his annual "Ten Thousand Commandments" scorecard. Mr. Crews recently reported that there are more than 4,000 new regulations now in the pipeline, and he notes that in 2010 the bureaucrats set an all-time record by churning out 81,405 pages in the Federal Register, where new and proposed rules are published... And all of this comes before the hundreds of huge rule-makings still to come under the Dodd-Frank and ObamaCare laws. Dodd-Frank alone requires 243 new regulations, according to the analysts at the Davis-Polk law firm...
    One way or the other someone's going to get the **** end of the stick.
    On a macro level, this is not true. Mutually Beneficial Trade is mutually beneficial.

    And if you notice my idea is only a trade war against those nations who treat their citizenry in an abusive way - no trade wars will happen with those nations who treat their laborers fairly and humanely. Therefore, the global trade of goods will still flow, brunting the negative impacts you mentioned.
    trade wars against abusive nations is a foreign policy tactic - not an economic one. Like a shooting war, we would need to accept that Americans will hurt and our goal is to make them hurt more.

  3. #53
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by cpwill View Post
    no, they have a greater effect, because it matters who is doing the spending. economic decisions made by producers and consumers looking for the best return/product for the lowest price tend to make better economic decisions than those that are made by congresscritters seeking reelection.



    okay. when government spends money that it gets through debt - where did that money come from?



    and again, Goldenboy's literature, indicates that:
    Here is your problem; you are taking a study that analyzed the economic environments of post war OECD countries that emerged from WWII with considerable debt burdens. It is only natural (IMO) to see these said economies respond to tax cuts with real growth. Therefore, i agree with a great deal of the statements in this paper (the one which you failed to link).

    With that said, this paper does not analyze the zero interest rate environment (partly because it has never occurred on a global level until lately), and therefore your attempt to pigeon hole it as the end all proof that fiscal spending is always unnecessary fails miserably. It is this "all or nothing"/"black or white" take on the political economy that discredits a great deal of what you post.

    Going back to how this relates to Keynesianism (and not the normative economic tangent), the policy response when interest rates are at or above normal levels would be to decrease taxes, which in turn provides both an income effect and a deceleration of prices (inflation falls). It should also be mentioned that government spending as a % of GDP accelerated during the same time tax cuts were in place, and it will not show up in the data because it is not counted as fiscal stimulus in the form of spending. Therefore, we are in agreement on tax cuts vs spending increases as a means of fiscal response when interest rates are not at the zero bound.

    But when they are, things change tremendously; the first being the response to tax cuts. You see, in a zero interest rate environment, personal saving increases exponentially (d-59). While that is certainly beneficial farther down the road, it is a strain on real output growth. Cutting taxes in a zero interest rate environment is non-optimal for the reason i just mentioned, because any real increases in income (as a result of tax cuts) have a greater propensity to be saved rather than spent. Depending on the nature of the tax cuts (are they permanent or not), they can be entirely saved. Lower taxes are also known to decelerate inflation; but in a zero interest rate environment such a desire is counter-productive.

    In the end, you displayed a great deal of ignorance in regards to Keynesian macro economic theory and your critiques are based entirely on ideology. The next time you are going to throw your hat into the "im against it" camp, make sure it's because of something you have come to believe after you have objectively analyzed it, and not because your favorite radio and political personalities are against it.

    Further readings:

    1
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    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

  4. #54
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by Goldenboy219 View Post
    If the uses were so productive in late 2008, early 2009, then why were businesses failing? We witnessed a slew of the largest bankruptcies in history and here you stand making an arbitrary comment about productive uses.
    a slew of government policies (for example, the preferential tax treatment of debt) encouraged mass malinvestment in 21st century Tulip Bulbs. the bubble popped. this is one of the pieces of keynesianism that I will admit really makes me facepalm - this drive to Just Keep The Bubble Going No Matter What Keep The Bubble Going.

    sometimes you need a period of creative destruction in the marketplace. changes in technology, changes in policy... or bubbles popping. attempting to shore them up and prop up the fall or somehow reinflate the bubble are doomed to failure and will create more harm in the meantime.

    It's like a doctor tells you you have lung cancer, and the response is to refuse care and increase smoking because smoking makes you feel good.

    Tax cuts to stimulate demand are Keynesian; if you support such policies then you are in fact supporting Keynesianism.
    no, because the Keynesian approach is to "cut taxes" in such a way to increase demand - so for example ya'll will support one-time-only "Tax Rebates" that have little if any effect in an indebted and troubled economy such as our own. Cutting Taxes to increase productive behavior requires permanent reduction in tax rates and permanent tax code simplification to reduce compliance costs and and the efficiency reductions that you can see in shelters.

  5. #55
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by cpwill View Post
    a slew of government policies (for example, the preferential tax treatment of debt) encouraged mass malinvestment in 21st century Tulip Bulbs. the bubble popped. this is one of the pieces of keynesianism that I will admit really makes me facepalm - this drive to Just Keep The Bubble Going No Matter What Keep The Bubble Going.
    It's hard to argue with people who treat demand and capital as homogeneous units. Such simplistic analysis necessarily falls short.

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

  6. #56
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    Re: Do you support Keynesian economics?

    I believe that business operates best without Governmental intrusion and few regulations and controls, and we would all be better off without Keynesian economics.

  7. #57
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by phattonez View Post
    It's hard to argue with people who treat demand and capital as homogeneous units. Such simplistic analysis necessarily falls short.
    what I don't get is their insistence on trying to reflate the bubble. as though that were what we wanted.

  8. #58
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by cpwill View Post
    what I don't get is their insistence on trying to reflate the bubble. as though that were what we wanted.
    They insist on deflationary spiral which is just theoretically and empirically false. They ignore the growth during the so-called Long Depression and the many times the US went through deflation during the panics in the 19th century and the quick correction that came as a result.

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

  9. #59
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    Re: Do you support Keynesian economics?

    Quote Originally Posted by Chappy View Post
    Do you support Keynesian economics?

    Yes
    No
    Don't know
    Don't care
    If you want Keynesian economics, just go where you can get it--Russia, China, North Korea, etc.

    If you hate individual liberty that much, you DON'T belong in America.

  10. #60
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    Re: Do you support Keynesian economics?

    Wow... I will state this once: If you think that Keynesian economics works, has worked, or will work in the future, you know NOTHING about economic policy.
    =- Pro Deo et Patrae -=

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