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the point that I was trying to make is that we now have people trying to tell us government debt is actually a good thing. I was accused of making a false argument, and so provided proof of people saying so.
No, rather you have people telling us this:
Create jobs now with stimulus spending (which would increase the deficit) and pay down the deficit once the economy starts to recover.
This is much different than your "tell us government debt is actually a good thing" straw man.
It is unfortunate that things are being distorted for political reasons, the economy is not going to fix itself and paying down the deficit now will result in higher unemployment. I find it amazing that some people seem to think you get an economy to grow by reducing demand. Why in the world is a business going to invest in new infrastructure, hiring employees, etc when demand is declining?! Perhaps people think you can magically reduce the deficit without reducing spending and/or increase taxes though.... Is that what you think Jim? Do you think Obama has a magic wand? You must.
Create jobs now with stimulus spending (which would increase the deficit) and pay down the deficit once the economy starts to recover.
This is much different than your "tell us government debt is actually a good thing" straw man.
It is unfortunate that things are being distorted for political reasons, the economy is not going to fix itself and paying down the deficit now will result in higher unemployment. I find it amazing that some people seem to think you get an economy to grow by reducing demand. Why in the world is a business going to invest in new infrastructure, hiring employees, etc when demand is declining?! Perhaps people think you can magically reduce the deficit without reducing spending and/or increase taxes though.... Is that what you think Jim? Do you think Obama has a magic wand? You must.
Despite what you may assume I am not against stimulus spending during economic contraction provided it is done properly. By that I mean investing in infrastructure with long term returns. Our current infrastructure is crumbling and very little is being done to rectify it. Instead we waste hundreds of billions on idiotic programs like cash for clunkers, extended unemployment, and home loan subsidies. Wasting money on short term feel good programs for political gain when the countries infrastructure is in need of trillions of dollars of repair is criminal. To continually increase debt service without long term benefit only damages the future economy. There is no such thing as a free ride; debts incurred today must be serviced tomorrow. Unless we are taking definitive steps to improve tomorrow’s economy, we are only asking for increased taxes at the same time as decreasing wages. That is the recipe for disaster.
I don't care what you call me, what is bothersome is your consistent need to politicize matters.
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No, yet this comment is entirely political. I'm interested in Political Philosophy and Economics your your political rhetoric.
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Your point here is silly, its like claiming that the problem with Newton is that he did not understand Quantum Mechanics. Keynes did not have the computational framework nor the theoretical framework to think about complex adaptive systems.
I'm not sure why you are including Hayek here as you are pretty much just repeating his criticism of Macro. Also, what you are saying has little to do with Keynes in particular but is rather an attack on macro-economics. The criticism is just as applicable to Monetarist as it is Keynesians.
Exactly, I am not a monetarist fan either. The rational market crowd has been very damaging to our country also. I do like a lot of Hayek’s criticism but not a lot of his solutions.
With our current system everything is just tinkering and reaction to unintended consequences. If we were to find a better solution than a debt based money supply, end corporate control by eliminating (or charging heavily for insurance) limited liability, replacing productivity taxes for taxes on monopoly such as land and natural resources, we would be much better off.
Despite what you may assume I am not against stimulus spending during economic contraction provided it is done properly.
I'm not assuming anything, rather I see you distorting what some people say. You are trying to equate fiscal policy with "deficits don't matter" and this is a very common meme right now.
Quote:
Originally Posted by jimhcom
Instead we waste hundreds of billions on idiotic programs like cash for clunkers, extended unemployment, and home loan subsidies.
The cash for clunkers was not that effective (it just pulled demand forward), but in principle it was not a bad idea. Having people trade in their old pieces of junk for newer cars that populate less and consumer less gas is in a sense an investment in the nation.
One of the big stories in this recession is how hard it is for some people to find jobs, its real easy to be against extended unemployment benefits when you have a job.
Anyhow, one can't expect every piece of stimulus to be effective the government are just people after all. What one would hope is that they discontinue ineffective stimulus as soon as it becomes clear that its ineffective. Unfortunately with the first-time buyer credit, etc they did not do that.
Around $300 billion of the stimulus is going for infrastructure and $275 billion went towards tax cuts (mostly for the middle-class which helps increase demand). The rest went to help the poor/unemployed and prevent states/local governments from having to implement mass layoffs.
A second round of stimulus would definitely focus more on infrastructure and on direct job creation. But a second round of stimulus is unlikely unless the economy starts to aggressively dip downward again, instead the nation gets to deal with Japanese like deflation and stagnation.
With our current system everything is just tinkering and reaction to unintended consequences.
How do you know what is and is not an unintended consequence? Monetary policy/fiscal policy are largely responding to exogenous events.
Quote:
Originally Posted by hilgi
If we were to find a better solution than a debt based money supply....
Yeah...how about sea shells? Worked for many natives! I wonder what the wallets would look like?
Quote:
Originally Posted by hilgi
end corporate control by eliminating (or charging heavily for insurance) limited liability
Yeah destroying the capital markets would be a great idea, after all investors are just going to line up to invest in start-ups, etc when they are personally liable for the company.
I'm not even sure what you think your ideas solve.
How do you know what is and is not an unintended consequence? Monetary policy/fiscal policy are largely responding to exogenous events.
That is my point, a bubble pops out on a tire and we push it down with a patch, yet another one pops up on the other side and we patch it, the process keeps repeating itself until the tire pops or is rendered useless.
Sometimes those outside forces are due to things we create and t is rare to know what will happen as we are creating them.
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Originally Posted by user_id
Yeah...how about sea shells? Worked for many natives! I wonder what the wallets would look like?
Ok, lets keep doing the same thing.
Quote:
Originally Posted by user_id
Yeah destroying the capital markets would be a great idea, after all investors are just going to line up to invest in start-ups, etc when they are personally liable for the company.
How would it destroy it? If corporations need liability protection in order to survive, they should have to pay for it. Corporate taxes and regulations are just games played by the government and corporations. Charter reform would even the playing field and increase revenue.
Quote:
Originally Posted by user_id
I'm not even sure what you think your ideas solve.
It would bring about an even playing field, reduce the amount of wealth created by monopoly status such as land owners, it would keep money in the pockets of productive wealth creators and help bring about abundance to more people.
That is my point, a bubble pops out on a tire and we push it down with a patch, yet another one pops up on the other side and we patch it, the process keeps repeating itself until the tire pops or is rendered useless.
Right the process keeps repeating itself because bubbles are a naturally occurring economic phenomena. How will not using monetary or fiscal policy help ameliorate matters? The popping of a bubble will be more extreme without monetary and/or fiscal policy and it won't help at all prevent the next bubble.
Quote:
Originally Posted by hilgi
How would it destroy it? If corporations need liability protection in order to survive, they should have to pay for it.
Because you are increasing the potential loss from their investment to their entire net worth. It would not make sense for someone worth $20 million to invest $100k into a company if that meant he/she could lose $20 million.
A corporation is a separate legal entity, who exactly should bare liability? Every shareholder? Also, corporations already pay for the liability as a corporation gets taxed as a separate entity. This is not to mention that businesses already pay for a number of liability issues. How many businesses have gone out of business because due to a law suit? It happens, but not very often.
The benefits of this are next to nothing, yet the harm to the capital markets and business investment would be huge.
Oh wait...you think this is a replacement for government regulation? haha...
Anyhow, I'm already aware of this line of thought I really don't need to "debate" with a parrot.
Right the process keeps repeating itself because bubbles are a naturally occurring economic phenomena. How will not using monetary or fiscal policy help ameliorate matters? The popping of a bubble will be more extreme without monetary and/or fiscal policy and it won't help at all prevent the next bubble.
Because you are increasing the potential loss from their investment to their entire net worth. It would not make sense for someone worth $20 million to invest $100k into a company if that meant he/she could lose $20 million.
A corporation is a separate legal entity, who exactly should bare liability? Every shareholder? Also, corporations already pay for the liability as a corporation gets taxed as a separate entity. This is not to mention that businesses already pay for a number of liability issues. How many businesses have gone out of business because due to a law suit? It happens, but not very often.
The benefits of this are next to nothing, yet the harm to the capital markets and business investment would be huge.
Oh wait...you think this is a replacement for government regulation? haha...
Anyhow, I'm already aware of this line of thought I really don't need to "debate" with a parrot.
Parrot? Who the heck am I parroting Mr. "tax the rich", ya no parroting there, what an original thought! LOL. Condescending people like you crack me up.
Obviously you are not aware of my line of thought at all or you would have understood my tire analogy was a metaphor and not actual "bubbles". Plus you would understand how paying for the PRIVALAGE of government granted limited liability won't keep people from investing, it just provides the government with revenue in order to protect shareholders. I was going to explain how it would work, but you already know, right?
Go ahead and run with your tail between your legs while you think you know it all yet you can't keep up. Why did I waste my time?
Obviously you are not aware of my line of thought at all or you would have understood my tire analogy was a metaphor and not actual "bubbles".
Plus you would understand how paying for the PRIVALAGE of government granted limited liability won't keep people from investing, it just provides the government with revenue in order to protect shareholders.
Perhaps you are not aware, but some read a variety of things and not just the things that they already agree with. Understanding something and agreeing with it are two rather different things. You once again seem to think merely repeating your position over and over again makes it correct.
Anyhow, your analogies and comments are always loaded. That is to say, you sweep in all sorts of issues in your analogies/comments and my responses are a small attempt at separating matters.
Quote:
Originally Posted by hilgi
Go ahead and run with your tail between your legs while you think you know it all yet you can't keep up.
You're right I can't keep up with your continuous politicization of issues and your continuous question begging. You win!
Perhaps you are not aware, but some read a variety of things and not just the things that they already agree with. Understanding something and agreeing with it are two rather different things. You once again seem to think merely repeating your position over and over again makes it correct.
Anyhow, your analogies and comments are always loaded. That is to say, you sweep in all sorts of issues in your analogies/comments and my responses are a small attempt at separating matters.
You're right I can't keep up with your continuous politicization of issues and your continuous question begging. You win!
You debate with what you think someone is about, not what they are saying. I have seen you do it with others.
Yes, your Robin Hood utopian scheme is not political at all, thanks for keeping it above politics.
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