The Death of Keynesian Economics

[code1211]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

In fairness to the theory, the buffoons who were trying to operate the government infusion of money into the economy stole so much of, used so much for bribes, spent so much on pay backs and wasted so much creating of saving government jobs that the theory really didn't have a chance to work.

I don't think it could work executed the way these dolts did it. It has appearred to work in the past because the economy recovers while the Keynesians are spending money on graft and corruption. It might have happened again this time, but the wound inflicted was just a tad too deep.

The Dems gambled that they could steal a Trillion dollars and that the economy would recover on its own while they were doing it so they could claim to have made it recover. They lost the bet. The biggest economy in the world hobbled by the most crooked government in the world.

It looked like an even fight, but the crooks proved to be just too crooked.

 

[Bfgrn]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

Yea...Trickle down voodoo economics has worked so well...

 

[rdean]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

Well, since you know so much, perhaps you could answer this:

How is Republican support for moving American jobs to China good for our economy?

And don't say the Republican leadership doesn't support such a move. We both know it would be a lie.

2 things you need to cite:

1. Link to a Republican party Platform plank that spells out what you just said.
2. Demonstrate how the jobs stopped going to China effective with the control of Congress by the Dems in 2006.

If you can prove neither of these things, you are wrong. Period.

It doesn't matter how many scientist self identify as Republican.

Out of curiosity, how many Democrat Congressmen will self identify as unemployed in January?

Hello dumbass. Republicans put troops in Iraq and Afghanistan. Are they still there? Is that the fault of the Democrats?

When the party in power does something, the other party can't always just "stop it". That's not the way our government was designed. Tell me you knew that.

 

[CMike]

When will the democrats understand?

Keynesian/socialist/communist economics will not work.

 

[Norman]

When will the democrats understand?

Keynesian/socialist/communist economics will not work.

Uhm... Republicans are just the same. No reason to blame only one party. Republicans can't even name one thing to cut from the budget. Anyway both parties are corrupt, washington is corrupt.

Us has some type of Keynesian/socialist/facist government. And the Keynes is there just to justify the big govt. I don't think keynes quiet advocated gov to go this far....

 

[Ravi]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

Too bad since it was working.

Why do you hate America?

 

[jillian]

When will the democrats understand?

Keynesian/socialist/communist economics will not work.

when will rightwing extremists understand that trickle down economics is a fantasy.

 

[finebead]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

I am not an expert on the great depression, but your statements are a gross oversimplification, and I believe you assert a cause and effect relationship between govt. spending and prolongation of the depression, that is not accurate.

My impression is that after the stock market crash and beginning of the depression in 1929, Hoover did not stimulate the economy. Things got much worse, and the public threw out the repubs and gave the govt. to Roosevelt in 1932, 3 years into the depression and near its bottom. I don't know exactly when the CCC and WPA works programs got up and running, but the voters hated that so much they elected Roosevelt 3 more times (sarchasm)!

What role did securities fraud play and bank over-leverage and subsequent bank failures. Remedies, we got the SEC out of this, and the FDIC, and there were limits on bank leverage set at 15:1 until the republican SEC relaxed the net capital rule for the 5 big investment banks in 2004, leading to their collapse in 2008.

Maybe you can post a scholarly article, like not from a republican shill site and we can all get educated.

Of course a huge problem in the depression was the deflation that took hold. If you bought a farm for $1,000 and planned to sell wheat for $1 a bushel to pay off the note, and wheat fell in price to .50 a bushel, you could not service your debt because you business model was shot, prices had fallen too far to service the debt you had. Nobody would buy anything because they thought if you waited a year you could buy it cheaper. Commerce came to a halt, then unemployment rose, and the economy was in a death spiral, a race to the bottom of economic activity where only commerce that was REQUIRED was conducted. You had to eat, dress minimally, and the dead were buried. Then you were at the bottom and things could begin to get better when there was no farther to go down.

Your impression is wrong.

Hoover's dam folly: Why Keynesian New Deal policies failed - CSMonitor.com

Your lack of a proper understanding of history might indicate why you think you know something about economics.

You have provided nothing to show my view is wrong.

First, your article could not be more BIASED, written by Doug French who writes for the Mises Institute. Ludwig Von Mises Institute describes themselves this way in the "About" page:

About the Mises Institute
Mises.org

You have found the world center of the Austrian School of economics and libertarian political and social theory.

About the Mises Institute - Mises.org - Mises Institute

Second, the article in no way attacks Keynesian economics. They acknowledge the Hoover Dam ushered in great growth in the southwest for the last 70 years, and they seem to be complaining that now the region is running out of water, so the Hoover Dam was not good. That is stupid logic. No solution is unlimited (although some are almost or seemingly unlimited, like solar energy, but even our sun will eventually burn itself out). That does not mean you should not implement the solution, it means you need to be aware of the limitations. That is not an issue of Keynes or the Austrian school, its a matter of mother nature, and in certain regions, mother nature has limits and people can't do anything about it.

But this thread is not about water supplies, it is about whether Keynesian policies work, and I have not seen a creditable argument yet that they do not.

In general, the Keynesian policy makes sense to me, when the economy is in a down-spiral, individuals stop spending, business sector stops spending, the only sector that can keep spending and help the economy stop the down spiral is the govt. sector spending.

Now that solution is not unlimited either, at some point I am sure too much govt. spending and debt can have other negative consequences, and the question is "at what point does that occur?".

 

[Kevin_Kennedy]

I am not an expert on the great depression, but your statements are a gross oversimplification, and I believe you assert a cause and effect relationship between govt. spending and prolongation of the depression, that is not accurate.

My impression is that after the stock market crash and beginning of the depression in 1929, Hoover did not stimulate the economy. Things got much worse, and the public threw out the repubs and gave the govt. to Roosevelt in 1932, 3 years into the depression and near its bottom. I don't know exactly when the CCC and WPA works programs got up and running, but the voters hated that so much they elected Roosevelt 3 more times (sarchasm)!

What role did securities fraud play and bank over-leverage and subsequent bank failures. Remedies, we got the SEC out of this, and the FDIC, and there were limits on bank leverage set at 15:1 until the republican SEC relaxed the net capital rule for the 5 big investment banks in 2004, leading to their collapse in 2008.

Maybe you can post a scholarly article, like not from a republican shill site and we can all get educated.

Of course a huge problem in the depression was the deflation that took hold. If you bought a farm for $1,000 and planned to sell wheat for $1 a bushel to pay off the note, and wheat fell in price to .50 a bushel, you could not service your debt because you business model was shot, prices had fallen too far to service the debt you had. Nobody would buy anything because they thought if you waited a year you could buy it cheaper. Commerce came to a halt, then unemployment rose, and the economy was in a death spiral, a race to the bottom of economic activity where only commerce that was REQUIRED was conducted. You had to eat, dress minimally, and the dead were buried. Then you were at the bottom and things could begin to get better when there was no farther to go down.

Your impression is wrong.

Hoover's dam folly: Why Keynesian New Deal policies failed - CSMonitor.com

Your lack of a proper understanding of history might indicate why you think you know something about economics.

You have provided nothing to show my view is wrong.

First, your article could not be more BIASED, written by Doug French who writes for the Mises Institute. Ludwig Von Mises Institute describes themselves this way in the "About" page:

About the Mises Institute
Mises.org

You have found the world center of the Austrian School of economics and libertarian political and social theory.

About the Mises Institute - Mises.org - Mises Institute

Second, the article in no way attacks Keynesian economics. They acknowledge the Hoover Dam ushered in great growth in the southwest for the last 70 years, and they seem to be complaining that now the region is running out of water, so the Hoover Dam was not good. That is stupid logic. No solution is unlimited (although some are almost or seemingly unlimited, like solar energy, but even our sun will eventually burn itself out). That does not mean you should not implement the solution, it means you need to be aware of the limitations. That is not an issue of Keynes or the Austrian school, its a matter of mother nature, and in certain regions, mother nature has limits and people can't do anything about it.

But this thread is not about water supplies, it is about whether Keynesian policies work, and I have not seen a creditable argument yet that they do not.

In general, the Keynesian policy makes sense to me, when the economy is in a down-spiral, individuals stop spending, business sector stops spending, the only sector that can keep spending and help the economy stop the down spiral is the govt. sector spending.

Now that solution is not unlimited either, at some point I am sure too much govt. spending and debt can have other negative consequences, and the question is "at what point does that occur?".

Why does him being the Chairman of the Mises Institute disqualify his article?

 

[Bfgrn]

When will the democrats understand?

Keynesian/socialist/communist economics will not work.

when will rightwing extremists understand that trickle down economics is a fantasy.

When Fox News reports it...

 

[CrusaderFrank]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

Yea...Trickle down voodoo economics has worked so well...

I beg you to run on restoring the 90% tax rate for 2012!

 

[CrusaderFrank]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

Too bad since it was working.

Why do you hate America?

You have a strange definition of "Working"

 

[psikeyhackr]

I am not an expert on the great depression, but your statements are a gross oversimplification, and I believe you assert a cause and effect relationship between govt. spending and prolongation of the depression, that is not accurate.

Well at least not everybody is illiterate about The Depression and Kyenesianism.

First of all Keynesianism has never been tried.

Keynes said that during GOOD TIMES the government should build up a surplus. Only during economic downturns should the government spend to stimulate the economy.

But is that what politicians have done? NO! So when the economy has been totally screwed up by politicians using Keynesianism as an excuse for whatever STUPID SPENDING they wanted to do who gets the blame.

Oh yeah, Keynes did it.

Keynes said the FDR was an economic illiterate. FDR did not do what Keynes said to do until WWII forced his hand. Then the economy boomed with government debt financed war production.

But what did Keynes say about PLANNED OBSOLESCENCE? What did Keynes say about how much consumers lose on the depreciation of junk? What has any economist ever said about making that 700 year old double-entry accounting mandatory in our schools?

Fifth graders can learn accounting as well as collegians

We have $300 computers more powerful than 1980 mainframes and accounting can't be mandatory in our high schools. That wouldn't be because politicians and corporations want dumb voters and workers you suppose?

Economic Wargames

PBS Discussions :: View topic - The Algebra of Economics

psik

 

[loosecannon]

Keynes was also adamantly opposed to currency debasement, so much so that he refused to tip waitpersons. He said it would encourage inflation.

Keynes said that during GOOD TIMES the government should build up a surplus. Only during economic downturns should the government spend to stimulate the economy.

But is that what politicians have done? NO! So when the economy has been totally screwed up by politicians using Keynesianism as an excuse for whatever STUPID SPENDING they wanted to do who gets the blame.

Oh yeah, Keynes did it.

Monetarists took over in the 70's and tweaked Keynes principles dramatically. They had to because banking and fractional reserve lending and a debt based currency demand currency debasement to function.

But even Friedman gets blamed for things he was adamantly opposed to by folks who want to adopt some of his ideas and not all of them.

 

[william the wie]

Keynes had some major league problems as his contemporary Knight at the university of Chicago pointed out his understanding of the profound differences between uncertainty, risk and false knowledge was flawed. He was so good at debate tricks that he failed to make his case convincingly. At some point after hearing him most people tuned him out. All that said anyone reading what he wrote in the general theory is not going to think that US economic policy is or has ever been Keynesian.

What is worst about this thread's debate is that with the exception of LC and the poster above him the debate is strawman vs. red herring.

 

[loosecannon]

Willie, FWIW, Keynes, Friedman, Einstein and the father of quantum mechanics Niels Bohr all were unmatched debaters in their time.

It is extremely possible that they only rose to prominence based on the sheer strength of their persuasive powers, not the strength of their ideas perse.

Bertrand Russell, himself one of the premier thinkers of the last century was quoted as saying he felt as if he took his life in his hands when he spoke with Keynes.

Bertrand Russel said "There are still many people in America who regard depressions as acts of God. I think Keynes proved that the responsibility for these occurrences does not rest with Providence.... Keynes's intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool. I was sometimes inclined to feel that so much cleverness must be incompatible with depth, but I do not think that this feeling was justified."

 

[Kevin_Kennedy]

I am not an expert on the great depression, but your statements are a gross oversimplification, and I believe you assert a cause and effect relationship between govt. spending and prolongation of the depression, that is not accurate.

Well at least not everybody is illiterate about The Depression and Kyenesianism.

First of all Keynesianism has never been tried.

Keynes said that during GOOD TIMES the government should build up a surplus. Only during economic downturns should the government spend to stimulate the economy.

But is that what politicians have done? NO! So when the economy has been totally screwed up by politicians using Keynesianism as an excuse for whatever STUPID SPENDING they wanted to do who gets the blame.

Oh yeah, Keynes did it.

Keynes said the FDR was an economic illiterate. FDR did not do what Keynes said to do until WWII forced his hand. Then the economy boomed with government debt financed war production.

But what did Keynes say about PLANNED OBSOLESCENCE? What did Keynes say about how much consumers lose on the depreciation of junk? What has any economist ever said about making that 700 year old double-entry accounting mandatory in our schools?

Fifth graders can learn accounting as well as collegians

We have $300 computers more powerful than 1980 mainframes and accounting can't be mandatory in our high schools. That wouldn't be because politicians and corporations want dumb voters and workers you suppose?

Economic Wargames

PBS Discussions :: View topic - The Algebra of Economics

psik

Wars don't create prosperity. Otherwise we wouldn't have had a recession.

 

[loosecannon]

Wars don't create prosperity. Otherwise we wouldn't have had a recession.

Thanks for the non sequitur, Lao Tzu.

 

[Kevin_Kennedy]

Wars don't create prosperity. Otherwise we wouldn't have had a recession.

Thanks for the non sequitur, Lao Tzu.

No problem, Hank.

 

[Bfgrn]

The election results in 2010 did more than take the Speaker gavel from the hand of the most dangerous woman on the planet, it was the death knell of the Keynesian economic theory.

The track record of JM Keynes "Increased government spending to stimulate the economy" has been a total, utter failure here in the USA every time its been tried.

Presidents Hoover and FDR tried it and they took a recession and turned it into the greatest economic decline since Atlantis sunk under the waves. Increased government spending yielded a decade long decline and 20% average unemployment.

In 2008 Obama tried his version and the Stimulus and $1.3 Trillion deficits and the $3 trillion the Fed has pumped out have done nothing positive for the economy; they have only exacerbated the problem. Do you understand that we've poured out almost $5 trillion since the start of 2009 to help the economy and it's not done a single positive thing?

Progressive have lied to use for generation about how the New Deal saved America from Capitalism. Now that they've lost their media monopoly we see the truth: Government Spending = Epic Fail.

It cost the Democrats Congress, it should Krugman his Noble Prize and we should laugh hysterically next time someone suggest we need "more government stimulus" to help the economy.

We just need to get through this period with our nation still intact, then we can laugh.

Yea...Trickle down voodoo economics has worked so well...

I beg you to run on restoring the 90% tax rate for 2012!

And you right wing Monica Lewinskys for the rich can run on how Bush's tax cuts created jobs and economic growth.

A lost decade for U.S. economy, workers

Washington Post
Saturday, January 2, 2010

For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different.

The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth.

It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism -- there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable.

There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 -- and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

And the net worth of American households -- the value of their houses, retirement funds and other assets minus debts -- has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.

Aughts were a lost decade for U.S. economy, workers - washingtonpost.com