Keynesian economics

Discussion in 'Economy' started by Supposn, Jul 16, 2010.

  1. Supposn
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    Supposn Senior Member

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    Generally, governments' economic stimuli are politically popular and their attempts to dampen their economies are unpopular. Both Keynesian and other economic philosophies must deal with occurrences of “overheated” economies.



    Government’s TEMPORARY expenditures for stimulus programs during economic recession or depression stress are popular. When stimulus dollars are spent for needs that are likely in the future to increase and their amounts (due to currency inflation) are additionally more likely to increase, they are both economically and politically sensible.



    At such economically stressful times TEMPORARY increased federal spending. grants or loans for increased durations of unemployment insurance, and sustaining necessary federal, state or local public services, (i.e. the general physical and social welfare of our nation) within the nation’s financial capabilities, are (in my opinion) economically justifiable.



    A problem arises when public funds or credit is risked for loans, (particularly loans directly or indirectly for non-government entities) are due to their extent of risk or other attributes of the loans to be intrinsically less justified.



    The purpose of anti-trust or monopoly or oligopoly laws and regulations is to provide more level playing fields for all entities and no non-government entity should ever be permitted to grow “to big to be permitted to fail”. USA’s laws and regulations are obviously inadequate. The lack of governments’ explicitly drafted, equally and diligently enforced regulations are “not the solution, but rather the cause of our problems”.

    Respectfully, Supposn
     
  2. Truthmatters
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    Truthmatters BANNED

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    to bad history and economics dont agree with you
     
  3. Annie
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    Annie Diamond Member

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    Krugman?s Tales From The Crypt | The New Republic

     
  4. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    This bit in your mostly incoherent post caught my eye.

    Why do you limit "Too Big To Fail" to only non-government entities. Why should Government (eg, ObamaCare) or Government Sponsored Entities (yes, I am thinking of Fannie Mae and Freddie Mac) be allowed to grow "to big to be permitted to fail" (sic)?
     
  5. Supposn
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    Supposn Senior Member

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    There have been USA Government Supported Entities, (GSEs) have existed in the USA since the First World War. Fannie Mae was created during the depression to provide a secondary market for the federally insured FHA loans. It worked fine. After the Second World War Freddie Mac was created because due to the newly created VA loans, (Fannie Mae was growing too large). Both GSEs attracted financial institution investors, and eventually they evolved to having individual investors and non-government members on the board of directors. The increased private investors better promoted the purpose of the GSEs. GSE’s very well accomplished their purpose which was to decrease the interest rates and increase the secondary market and the pool of funds available for federally insured loans.

    The problem was that the financial communities’ lobbyists finally got what they wanted. A Democratic Congress passed and Nixon signed to be enacted an act that enabled the GSEs to deal with commercial, non-government insured loans.

    Banks with FDI accounts lobbied to re-continue acting as investment banks. (Since the crash the reopening of audited banks, such banks had been prohibited from acting as investment banks). While regulations that had well served our economy were being decreased or terminated, the financial industry was creating new unregulated financial products that increased speculators’ credit leverage.

    If only the GSEs had remained legally limited to dealing only with federally insured loans, a financial fiasco that severely harmed USA’s and many other major national economies could not have occurred. The USA credit was at stake because there is an implied guarantee that the United States Treasury will is a guarantor of the GSE’s. The GSE’s were now dealing with non-federally insured loans that the USA originally had no reason to guarantee.

    Private financial institutions were speculating and risking “public credit”. Heads they win, tails the USA and the world loses. This was a perfect storm due to inadequate government regulation of GSEs, private entities and their financial products.

    Respectfully, Supposn
     
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  6. Supposn
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    Supposn Senior Member

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  7. psikeyhackr
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    psikeyhackr VIP Member

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    What did Keynes ever say about planned obsolescence?

    Keynes was born in 1883, the year Marx died. When Henry Ford introcuced the Model-T Keynes was 25 years old.

    How much do American consumers lose on the depreciation of automobiles every year? How much is lost world wide on automobile depreciation? What do economists say about that? But when we buy more cars the nitwit economists add it to GDP and say nothing about all of that DEPRECIATION.

    Buy a $2000 laptop that will be worth $500 in two years. The economists will ignore that depreciation too.

    Ever heard of NET DOMESTIC PRODUCT? Only the depreciation of CAPITAL GOODS gets subtracted. We are running a planet of 7 billion people on defective grade school algebra. PhD economists are SO INTELLIGENT!

    discussions (dot) pbs (dot) org/viewtopic.pbs?t=28529

    Double-entry accounting is 700 years old and netbook computers are more powerful than 1980 mainframes. When was the last time you heard an economist suggest that accounting be mandatory in our schools? [82]

    psik
     
    Last edited: Jul 18, 2010
  8. Big Fitz
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    Keynesian economics has failed every time it's been tried in time of crisis.
     
  9. Yukon.
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    Yukon. Active Member

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    Supposn,

    Thgank you for the thoughtful post. Unfortunately most of the people who post here never got past Elementary School therefore they have no idea what you mean. They only understand the likes of Limpdick, Beck, and O'Reilly.
     
  10. Big Fitz
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    Government should be prevented from competing with both charitable giving as well as any activity of the private sector.

    Government is the personification of force, and therefore should be prevented from playing in the game but instead restricted to being only the referee. The instant the referee takes sides, a fair game i impossible and no player can win... save the referee who gains all.
     

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