When has Keynesian economics, ever worked? (illegal, Clinton, Kennedy, illegals)
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The Keynesian theory is that when the economy operates below its potential output, use of monetary and fiscal government measures can bring the economy closer to potential. This is constantly being used to successful ends.
so in laymans terms...when something is FAILING, use the GOVERNMENT to carry it.....
The 1983 fed funds rate ranged from 9.25-9.62%. This was well above the inflation rate of which ranged from 2.46-3.90% and served to dry up the money supply and restore the lost value of the US dollar. By May of 1984, the dollar reach what is still its all-time high sparking an economic boom of historic proportions with 9.3% GDP, massive hiring and inflation under 3%.
You have a misguiding view of economic history. Due to high inflation, as noted above, the Federal Reserve drastically tightened money (e.g. raised rates) to contract the economy in order to combat that inflation. That sent the economy into a recession.
The economic recovery of 1983 was due to the Fed relaxing. This type of recession is V-shaped, with a rapid recovery once the Fed relents and that's what we had as interest rates fell and borrowers could afford loans. It had nothing to do with strong dollar nonsense and drying up the money supply. The money supply actually was increasing until mid-1987, as this graph indicates:
Incidentally, the dollar's high was in 1985, not 1984, and precipitously dropped from there. Just three years later it lost more than half it's value and had virtually no impact on the good economy. If anything, it improved the economy as it made American products more competitive.
so in laymans terms...when something is FAILING, use the GOVERNMENT to carry it.....
got it thanks
you can keep your fascism
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The government is a tool. Just like doctors use medicines to cure patients, the government tools can be used to calm inflation and mitigate recessions. Conservatives are against using these tools because it undercuts their ideology that government actions are always bad. So they want to hamstring the government to make it a self-fulfilling prophecy.
The reality, of course, is that these tools work, as evident by the fact that economic disasters were far more prevalent under Laissez Faire than the time afterwards. The 19th century was a collection of boom and bust cycles and periods of high inflation and deflation -- all while the nation was under the conservative darling, the gold standard.
Why would anyone not want to use tools and be subjected to uncontrolled economic swings?
Oh, you obviously don't know the definition of fascism.
The government is a tool -- just like doctors use medicines to cure patients. The government tools can be used to calm inflation and mitigate recessions. Conservatives are against using these tools because it undercuts their ideology that government actions are always bad. So they want to hamstring the government to make it a self-serving prophecy.
The reality, of course, is that these tools work, as evident by the fact that economic disasters were far more prevalent under Laissez Faire than the time afterwards.
Why would anyone not want to use tools and be subjected to uncontrolled economic swings?
Oh, you obviously don't know the definition of fascism.
I think it is ironic that your tools can also destroy what it was designed to prevent... usage is one thing and misuse is another... I think it ironic that you can't see how the government created a lot of this financial disasters because of these tools... I think it ironic when most of these tools are misused it is in the hands of Democrats and yet you blame conservatives... I think it is incredibly ironic that economic disasters occur under Laissez Faire but if you take it at its purest form, we have NEVER had a true Laissez Faire because it would require the government to give up on its influence in the finance of America which has never happened... ironic...
The government is a tool -- just like doctors use medicines to cure patients. The government tools can be used to calm inflation and mitigate recessions. Conservatives are against using these tools because it undercuts their ideology that government actions are always bad. So they want to hamstring the government to make it a self-serving prophecy.
The reality, of course, is that these tools work, as evident by the fact that economic disasters were far more prevalent under Laissez Faire than the time afterwards.
Why would anyone not want to use tools and be subjected to uncontrolled economic swings?
Oh, you obviously don't know the definition of fascism.
oh please failure is failure and success is success
if I am the worst mechanic in town, I dont expect the government to carry me...if I fail, then I fail
economics goes in CYCLES,,,you CANT have an ALWAYS up
using the government to CARRY a cycyle makes it worse
look at the so-called stimulus...states got money...used it to KEEP THE SAME (some even expanded spendinng) for the first year.........NOW no more stimulus..now states have to CUT back HARD, because they were CARRIED for a year or two....it would have been easilr if it was 3 years of small cuts than to be in BIG trouble now
and its even worse since the government doesnt understand that 'one size' does not fit all
its like the min wage....$7/hr is NOTHING , in NY...its lower than poverty.....but $7 in Mississippi is a living wage
Oh, you obviously don't know the definition of fascism.
""Fascism is a system in which the government leaves nominal ownership of the means of production in the hands of private individuals but exercises control by means of regulatory legislation and reaps most of the profit by means of heavy taxation. In effect, fascism is simply a more subtle form of government ownership than is socialism."" Mussolini
oh I do understand it well...my grandfather lived it
american liberals are almost exactly like the european fascists of the 20's and 30's
I think it is ironic that your tools can also destroy what it was designed to prevent... usage is one thing and misuse is another... I think it ironic that you can't see how the government created a lot of this financial disasters because of these tools... I think it ironic when most of these tools are misused it is in the hands of Democrats and yet you blame conservatives... I think it is incredibly ironic that economic disasters occur under Laissez Faire but if you take it at its purest form, we have NEVER had a true Laissez Faire because it would require the government to give up on its influence in the finance of America which has never happened... ironic...
Can you present any examples of "when most of these tools are misused it is in the hands of Democrats?"
You do realize that monetary policy is not conducted by Democrats nor Republicans, right?
When I use the term "Laissez Faire" to describe monetary policy, I'm primarily referring to the gold standard, whose price was determined by the marketplace during the 19th century.
Can you present any examples of "when most of these tools are misused it is in the hands of Democrats?"
You do realize that monetary policy is not conducted by Democrats nor Republicans, right?
When I use the term "Laissez Faire" to describe monetary policy, I'm primarily referring to the gold standard, whose price was determined by the marketplace during the 19th century.
Comparing the US economy today with the US economy of a century, or more, ago is comparing apples and oranges. Capitalist societies become more economically stable as capital accumulates over generations.
Comparing the US economy today with the US economy of a century, or more, ago is comparing apples and oranges. Capitalist societies become more economically stable as capital accumulates over generations.
What's the evidence that the credit goes to accumulation of capital and not better regulating the economy? One would think that as time goes on we'd learn a few tricks.
What's the evidence that the credit goes to accumulation of capital and not better regulating the economy? One would think that as time goes on we'd learn a few tricks.
Now we have each given an example of how it might not be simply the gold standard that caused the less stable economies of the earlier industrial ages.
I would say about the only major economic theory the two major parties agree upon is Ricardo's Theory of Comparative Advantage. I don't see governments as having learned a real lot in the last 50 years.
The differences between America in 1850 and America in 2011 are so numerous and vast that to pick one differing factor and claim it is the reason for less, or more, stable economies is absurd.
Larger systems tend to be more stable than smaller systems.
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