View Poll Results: You can't spend your way out of a recession

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  • Agree, you can't (generally)

    42 44.68%
  • Disagree, you can (generally)

    52 55.32%
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Thread: You can't spend your way out of a recession

  1. #91
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by Australianlibertarian View Post
    And yet the Chicago School has one of several theories that explain why people form companies or businesses.
    The Chicago school is very much so neoclassical.

    If someone generates a theory on subject A, their inability to develop or the lack of interest in developing a theory on subject B, does not invalidate the theory behind subject A.
    To make sound analysis about an economy denominated by firms, one must draw from the necessary theory.

    Yes, the Chicago School has tried to develop theories for just about every subject and area of economics. Good for them, man kind benefits from this endeavor. But the Austrians School of lack of 'covering the field' does not automatically repudiate or tarnish their theories.
    See above.
    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

  2. #92
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by Goldenboy219 View Post
    The Chicago school is very much so neoclassical.



    To make sound analysis about an economy denominated by firms, one must draw from the necessary theory.



    See above.
    Err no, now you are conflating subject.

    One is how companies are formed, the other as to how corporate or business dominated economy will perform. They are two different questions.

    The second question which is what you are getting at relates to statistical aggregates. Granted you may argue that the development of a firm theory may provide clues as to how companies influence economies. But you know as well as I know, that empirical studies are complex, multi-facitated, and take into account many factors.

    The Chicago Schools empirical studies particularly in marco modelling, and their 'rational actor' like models at the mirco, do not invalidate Austrian School theories straight off the bat. Sure, it may make the Chicago School theories more persuasive. But in itself, it does not give monetarist-consequentialist libertarians cart blanch right to blow the Austrian School straight out of the water.

    Lastly, managerialist theorists or stake-holder theorists have differing views on why companies form, and what are the advantages disadvantages of the company. And ultimately this would inform their macro-view of how economies perform. Consequently you have other Schools that share your methodology, but yet they may come to quite different conclusions. Such diversity in economic opinion does not repudiate the Austrian School, or show that they are inept, far from it.
    Last edited by Australianlibertarian; 02-18-10 at 08:53 AM.

  3. #93
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by obvious Child View Post
    So you also agree with Goobieman's position that government funding cannot create jobs?

    Tell me, what effect did spending trillions on defense during Reagan's years have upon the defense industry?

    If you think that the government cannot create jobs by spending, you must think that the defense industry did not expand, did not increase salaries, did not increase demand for raw materials and did not fund research which employed thousands.

    This forum is an excellent piece of evidence that America's public schools have utterly failed.
    Didnt you answer your own question? Reagan built up a military that had been in disarray. Defense spending went to contractors...not government employees. It required that the contractor PRODUCE an item or items. The contractor had to build things the government wanted. Increase PRODUCT (not service), increase in employers, increase in employees. In that sense the government was the customer.

    But that isnt what is being done with the stimulus money. MOST of it is going to 'save' government jobs. MOST of those jobs are at risk because the governments have mismanaged their budgets and tax base.

    All you have to do is look at your average liberal democrat voter to see that the public school system has dramatically failed. Democrat politicians have worked hard since the 60s creating a dependent class of crippled pets.

  4. #94
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by obvious Child View Post
    So you also agree with Goobieman's position that government funding cannot create jobs?

    Tell me, what effect did spending trillions on defense during Reagan's years have upon the defense industry?

    If you think that the government cannot create jobs by spending, you must think that the defense industry did not expand, did not increase salaries, did not increase demand for raw materials and did not fund research which employed thousands.

    This forum is an excellent piece of evidence that America's public schools have utterly failed.
    You might want to look into the history of the country...find out what has truly built our economy. It isnt government spending...it is INDUSTRY.

    We no longer have amn industrial base for our economy. We have a service base.

    The key trigger for the latest economic downturn was the housing market. New homes were being built in record numbers (construction is about the only remaining solid industry we have). Now...there ARE some problems there...namely...the costs of homes were vastly inflated...like the labor unions, we prioced ourselves out of the housing market. ALso...admiot it or dont, but I wouldl guess fully 35 to 45% of construction workers in MOST markets are either illegal undocumented immigrants, and a lot of them arent paid appropriately or taxed appropriately.

    And on that note...with approximately 20 to 30 million illegal immigrants here funneling their pay and resources back to their families, how much of our economy is being siphoned out of our job and consuymer market?

  5. #95
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by Australianlibertarian View Post
    Err no, now you are conflating subject.
    That was the point.

    One is how companies are formed, the other as to how corporate or business dominated economy will perform. They are two different questions.
    Yes. For one to believe they can prescribe macro policy when the existence of firms is not even within their "framework" seems.... I don't know... iffy

    The second question which is what you are getting at relates to statistical aggregates. Granted you may argue that the development of a firm theory may provide clues as to how companies influence economies. But you know as well as I know, that empirical studies are complex, multi-facilitated, and take into account many factors.
    My harp stems from another thread where Tony is claiming that lowing spending and taxes will always (100%) shorten recessions. The claim is based on the premise, "business have more money with less taxes and therefore will produce more" is overly simplistic. To argue to that extent without taking into consideration microeconomic firm organization and production theory is truly reaching. To then apply it to the macro economy misses the forest for the trees.

    The Chicago Schools empirical studies particularly in marco modelling, and their 'rational actor' like models at the mirco, do not invalidate Austrian School theories straight off the bat. Sure, it may make the Chicago School theories more persuasive. But in itself, it does not give monetarist-consequentialist libertarians cart blanch right to blow the Austrian School straight out of the water.
    Again, that was not my intention. If anything i am challenging him in the hope that he will branch out his "studies" in an attempt to be more well rounded. For one to state that they reject empiricism and then use empirically tested and confirmed theories when it supports ones argument calls for questioning.

    Lastly, managerialist theorists or stake-holder theorists have differing views on why companies form, and what are the advantages disadvantages of the company. And ultimately this would inform their macro-view of how economies perform. Consequently you have other Schools that share your methodology, but yet they may come to quite different conclusions. Such diversity in economic opinion does not repudiate the Austrian School, or show that they are inept, far from it.
    See above.
    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

  6. #96
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by obvious Child View Post
    Except that is exactly what you claimed.
    And thus, further evidence of a inability to comprehend what you read.

    The statement was made not in the global context, but in that of the current situation, the frame of reference in which the question was asked. Thus, any reference to FDR, etc, is meaningless as the situations are not comparable.

    Now, why dont you consider that for the moment, and re-consider your response.

  7. #97
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by Goldenboy219 View Post
    Yes. For one to believe they can prescribe macro policy when the existence of firms is not even within their "framework" seems.... I don't know... iffy
    You're not even backing this up. You always throw it about but I've explained to you why companies come into existence.

    My harp stems from another thread where Tony is claiming that lowing spending and taxes will always (100%) shorten recessions. The claim is based on the premise, "business have more money with less taxes and therefore will produce more" is overly simplistic. To argue to that extent without taking into consideration microeconomic firm organization and production theory is truly reaching. To then apply it to the macro economy misses the forest for the trees.
    Only the companies that are getting subsidized will get less money because of a tax cut.

    Again, that was not my intention. If anything i am challenging him in the hope that he will branch out his "studies" in an attempt to be more well rounded. For one to state that they reject empiricism and then use empirically tested and confirmed theories when it supports ones argument calls for questioning.
    What am I using that requires empiricism?

    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
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  8. #98
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    Re: You can't spend your way out of a recession

    spending creates confidence so that others will spend

  9. #99
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by phattonez View Post
    If you have a government that only allows jobs that produce war goods and the government pays for all those jobs you'll have full employment but your economy will blow.
    Perhaps, but better then having no jobs and no goods. Also remember that the build up of wealth from rationing but high employment caused an explosion in consumer demand when the war ended.

    I can't speak for them. They haven't delved into the economics of it enough.
    Correction. They haven't delved into economics period.

    Note, I don't disagree with you on the long term potential pitfalls.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

  10. #100
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    Re: You can't spend your way out of a recession

    What kind of spending?

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