The proof about Keynes at long last

[cbirch2]

Sorry ive been gone so long. Typing with a broken hand was too much trouble than this whole thing was worth.

As i read through your posts its clear you still dont understand much.

You talk a lot about dropping money from planes and things of that nature, you clearly dont understand how it works. Money printed by the federal reserve doesnt just go into the economy at large, mostly it goes to preserve whats already there.

And increased monetary base doesnt necessarily lead to inflation. Follow this scenario:

Banks always have less money on hand than they owe. If someone wants money out of their account that isnt there, the bank shuffles money around to give it to them. If too many people come that scheme unravels and the bank collapses.

The fed prevents this by acting as the lender of last resort. This doesnt increase aggregate demand or cause inflation. It simply allows depositors to access the money they already have, rather than allowing them greater capital through simply distributing printed money. The latter is inflationary, the first isnt.

Simple enough for you?

 

[Brutus]

Sorry ive been gone so long. Typing with a broken hand was too much trouble than this whole thing was worth.

As i read through your posts its clear you still dont understand much.

You talk a lot about dropping money from planes and things of that nature, you clearly dont understand how it works. Money printed by the federal reserve doesnt just go into the economy at large, mostly it goes to preserve whats already there.

And increased monetary base doesnt necessarily lead to inflation. Follow this scenario:

Banks always have less money on hand than they owe. If someone wants money out of their account that isnt there, the bank shuffles money around to
give it to them. If too many people come that scheme unravels and the bank
collapses.

Who are you debating and what about exactly


The fed prevents this by acting as the lender of last resort. This doesnt increase aggregate demand or cause inflation. It simply allows depositors to access the money they already have, rather than allowing them greater capital through simply distributing printed money. The latter is inflationary, the first isnt.

Simple enough for you?[/QUOTE]

 

[Euro]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history.

Krugman used WW 2 as his best example which left everyone laughing. Actually, Paul, unemployment was low because 12 million men were drafted into the military and because our factories were working overtime to make weapons that we used to bomb the competitions economies into the stone age!

For Keynes theory to work, you have to save money in economcial upturns. E.g in good times the economy is largely driven by export. Then the government can save money. And the private sector drives the economy in an upturn. The money can be saved in eg.g gold bars.

In a downturn government can and must start spending the saved money from the upturn. E.g. start buidling roads,bridgest,trains. In a downturn cheaper labour is available for this prosjects since their is high unemployment in the private sector.

Keynes can’t work if you don’t save the money from the economical upturns. And then is how the government spend it. Bombing bridges in the middle east is probobaly not the best way to spend tax money, why not build bridges in US instead?

So for Keynes to work money must be saved in upturns.

 

[Brutus]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history.

Krugman used WW 2 as his best example which left everyone laughing. Actually, Paul, unemployment was low because 12 million men were drafted into the military and because our factories were working overtime to make weapons that we used to bomb the competitions economies into the stone age!

For Keynes theory to work, you have to save money in economcial upturns. E.g in good times the economy is largely driven by export. Then the government can save money. And the private sector drives the economy in an upturn. The money can be saved in eg.g gold bars.

As a liberal you won't know what you are talking about . Krugman said not one word about savings but rather was arguing for huge Keynesian spending despite a $15 trillion national debt
Ow

In a downturn government can and must start spending the saved money from the upturn. E.g. start buidling roads,bridgest,trains. In a downturn cheaper labour is available for this prosjects since their is high unemployment in the private sector.

Keynes can’t work if you don’t save the money from the economical upturns. And then is how the government spend it. Bombing bridges in the middle east is probobaly not the best way to spend tax money, why not build bridges in US instead?

So for Keynes to work money must be saved in upturns.[/QUOTE]

 

[Sallow]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history.

Krugman used WW 2 as his best example which left everyone laughing. Actually, Paul, unemployment was low because 12 million men were drafted into the military and because our factories were working overtime to make weapons that we used to bomb the competitions economies into the stone age!

So stimulus doesnt work, and the economy just happened to have a historically powerful rebound right after it was signed and began to slow as it ran out.......

Just a coincidence though....no correlation....

LMAO god anti-keynsians are idiots. Its just like how they said the stimulus would raise interest rates, and instead they dropped. Or how they said bernanke was going to create inflation, when in reality a tripling of the monetary base did nothing because were in a liquidity trap.

Next time you criticize a Nobel laureate in economics, make sure you know very simple facts about economics. lol. noob.

If you only look at the asset side of the balance sheet, every company is a huge success!

ZOMG!!!!!!

Krugamn says the stimulus failed because it needed to be $3 Trillion, proving he's a complete fucking economic illiterate

He didn't say 3 trillion..he said 1.5 trillion. Which is correct. And it shouldn't have included tax cuts.

 

[Sallow]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history.

Krugman used WW 2 as his best example which left everyone laughing. Actually, Paul, unemployment was low because 12 million men were drafted into the military and because our factories were working overtime to make weapons that we used to bomb the competitions economies into the stone age!

For Keynes theory to work, you have to save money in economcial upturns. E.g in good times the economy is largely driven by export. Then the government can save money. And the private sector drives the economy in an upturn. The money can be saved in eg.g gold bars.

As a liberal you won't know what you are talking about . Krugman said not one word about savings but rather was arguing for huge Keynesian spending despite a $15 trillion national debt
Ow

In a downturn government can and must start spending the saved money from the upturn. E.g. start buidling roads,bridgest,trains. In a downturn cheaper labour is available for this prosjects since their is high unemployment in the private sector.

Keynes can’t work if you don’t save the money from the economical upturns. And then is how the government spend it. Bombing bridges in the middle east is probobaly not the best way to spend tax money, why not build bridges in US instead?

So for Keynes to work money must be saved in upturns.

[/QUOTE]

And Krugman is right. So is Keynes. The real trouble began with Bush. His spending without provisioning revenue left us in a huge mess.

 

[CrusaderFrank]

Republicans blame fannie and freddie for the mortgage bubble when they didnt even issue the loans.

as I said read "Reckless Endangerment" if you want to understand how Fanny controlled entire mortgage market. Here's a tiny tiny piece:

J. Bridges says:
Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.

For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60% of their area's median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down.

You're wasting electrons trying to educate cbirch; he's unteachable

 

[CrusaderFrank]

So stimulus doesnt work, and the economy just happened to have a historically powerful rebound right after it was signed and began to slow as it ran out.......

Just a coincidence though....no correlation....

LMAO god anti-keynsians are idiots. Its just like how they said the stimulus would raise interest rates, and instead they dropped. Or how they said bernanke was going to create inflation, when in reality a tripling of the monetary base did nothing because were in a liquidity trap.

Next time you criticize a Nobel laureate in economics, make sure you know very simple facts about economics. lol. noob.

If you only look at the asset side of the balance sheet, every company is a huge success!

ZOMG!!!!!!

Krugamn says the stimulus failed because it needed to be $3 Trillion, proving he's a complete fucking economic illiterate

He didn't say 3 trillion..he said 1.5 trillion. Which is correct. And it shouldn't have included tax cuts.

He said stimulus was less than a third of what it needed to be

"The bottom line is that the Obama plan is unlikely to close more than half of the looming output gap, and could easily end up doing less than a third of the job."

How Did We Know The Stimulus Was Too Small? - NYTimes.com

 

[Uncensored2008]

And Krugman is right. So is Keynes.

With all due respect Shallow; (which is to say none at all,) you know absolutely nothing about economics.

The real trouble began with Bush.

Partisan hackery is not the foundation for sound economic policy.

You hitch onto any idea that promotes your party. I don't believe that you have any real grasp of Keynes theory, much less any idea of whether it is effective.

His spending without provisioning revenue left us in a huge mess.

The above is an example of a sentence crafted to appear as if there were substance, when in fact there is none.

Provisioning revenue? Seriously?

First off, seven of 8 years of the Bush presidency were during periods of growth. Keynesian theory does not posit deficit spending as a needed stimulus during periods of growth. Ergo the Bush spending was utterly irrelevant to Keynesian theory.

You should let cbirch handle the questions on economics, while I disagree with him, he does know the subject. You OTH, do not.

 

[EdwardBaiamonte]

If you only look at the asset side of the balance sheet, every company is a huge success!

ZOMG!!!!!!

Krugamn says the stimulus failed because it needed to be $3 Trillion, proving he's a complete fucking economic illiterate

He didn't say 3 trillion..he said 1.5 trillion. Which is correct. And it shouldn't have included tax cuts.

He said stimulus was less than a third of what it needed to be

"The bottom line is that the Obama plan is unlikely to close more than half of the looming output gap, and could easily end up doing less than a third of the job."

How Did We Know The Stimulus Was Too Small? - NYTimes.com

Of course Krugman 100% fails to explain why when the government spends $1 dollar it does not create a non sustainable bubble that will burst leaving us worse off.

He also fails 100% to explain why taxing productive people[ to create a liberal bubble] who know how to sustainably invest and earn money does not depress the economy.

 

[cbirch2]

On a Sunday show Krugman said Keynesian stimulus works. Of course, if this was true all would have accepted it by now and he would have written an historic blockbuster book to prove it making him the greatest economist in history.

Krugman used WW 2 as his best example which left everyone laughing. Actually, Paul, unemployment was low because 12 million men were drafted into the military and because our factories were working overtime to make weapons that we used to bomb the competitions economies into the stone age!

For Keynes theory to work, you have to save money in economcial upturns. E.g in good times the economy is largely driven by export. Then the government can save money. And the private sector drives the economy in an upturn. The money can be saved in eg.g gold bars.

As a liberal you won't know what you are talking about . Krugman said not one word about savings but rather was arguing for huge Keynesian spending despite a $15 trillion national debt
Ow

In a downturn government can and must start spending the saved money from the upturn. E.g. start buidling roads,bridgest,trains. In a downturn cheaper labour is available for this prosjects since their is high unemployment in the private sector.

Keynes can’t work if you don’t save the money from the economical upturns. And then is how the government spend it. Bombing bridges in the middle east is probobaly not the best way to spend tax money, why not build bridges in US instead?

So for Keynes to work money must be saved in upturns.

[/QUOTE]

First, you wont hear krugman talking about saving because this is a downturn not an upturn. Keynes would say save in an upturn, this is not an upturn.

But more important...

To simply say that keynesian stimulus doesnt work is a vast stretch. By what measure?

Economic growth? Then it most certainly does work. The government could simply borrow money to hire all the unemployed, thats certainly possible.

Government debt? Well since we havent saved during upturns things are quite a bit more complicated. Conservatives like to claim that any borrowing increases the debt and therefore offsets any benefits from increased growth. This sounds good to a person that thinks economics and spending work like simple arithmetic, but it's just vastly over simplified.

When government has to borrow money to spend it the effects depend mostly on the health of the private sector. Conservatives like to imagine one dollar injected into the economy is simply a dollar, no. Its about how its spent. (Grover Norquist compares stimulus to taking water from one side of the lake and pouring it into the other, ridiculous). Therefore the question of whether or not the government should borrow becomes one of capital allocation. Can the government allocate the capital better than the people lending to it?

I would argue yes, and easily yes, because of the nature of the treasury market. People investing in 10-year treasury bonds are looking for a way to keep their money safe, while make a slight amount of interest. This isnt money that would otherwise go to consumption or investment. Its money that would otherwise be saved under a mattress or in a savings account.

In technical terms, money people spend on treasury bonds is money that would normally have a low fiscal multiplier, less than 1 because most of it would be saved. Money spent by the government has a fiscal multiplier over 1, because all of it will be spent.

So can government allocate capital better than its bond holders? Depends how you look at it. Certainly there is a vast amount of government waste, although on purely economic terms if its all spent it has a +1 fiscal multiplier ("economics is not a morality play"). But certainly if you look at beneficial investments the government has made over the past 60 years, its easy to see the potential benefit.

Take ARPANET, the first internet. Or the human genome project, almost entirely government funded.

Certianly the government has made amazing investment over the past few decades. We shouldnt use government waste as an excuse to neuter the federal government. Waste and fraud and corruption should be eliminated, but i for one am all for government investment.

 

[EdwardBaiamonte]

Economic growth? Then it[stimulus] most certainly does work. The government could simply borrow money to hire all the unemployed, thats certainly possible.

actually if true, economists would know it and unemployment would be obsolete. If you tax an employer with a $50k real job to create a $50k make-work job you have merely lost one real job and gained one welfare make work job. But the economy would crater because the make work job doesn't produce anything. Then, more become unemployed and more make work jobs are necessary, in the liberal mind anyway, until you have a soviet standard of living.

 

[EdwardBaiamonte]

Its money that would otherwise be saved under a mattress or in a savings account.

Certainly you can understand why liberals appear to be brain dead to conservatives? People don't put money in a mattress, especially people with real money. They put it in banks where professionals invest it in sustainable ways to grow the economy or they lose their jobs and customers. In the private sector its a life or death matter on which you bet your career everyday.

Liberals bureaucrats on the other hand have no skin in the game they are merely lazy bureaucrats on a fixed income who cant be fired. They could not survive in the private sector. They merely play with other peoples money, and, they have a monopoly to boot. That means no competition.

In short, the government wastes money in a very soviet or Greek way while life and death competitive capitalism invests it sustainably to produce real economic growth and prosperity.

 

[EdwardBaiamonte]

Certianly the government has made amazing investment over the past few decades.

The anti-American liberal socialist speaks!! Certainly the private sector has make 1 billion times more amazing investments over the past few decades!

Did you notice the Red China just switched to private sector capital allocation and instantly reversed centuries of liberal government en masse starvation! What does that teach you?

 

[EdwardBaiamonte]

The central point is that the banks were allowed to over leverage and apparently cant be trusted to act rationally.

what? you presume a liberal bureaucrat regulator knows what leverage is correct? Some customers want high leverage and high return, while others don't. How could a silly liberal guess at what leaverage is correct? Its a laughable concept.

Moreover, idiotic liberal regulators were the ones who said leverage in housing was fine because it was so safe while leverage in other areas , that were actually much safer, required higher leverage. To this day liberals still pretend they know what capital requirements are optimal.

Who can say with a straight face that Fanny Freddie subversion the the Republican free market did not cause the current housing crisis?

 

[cbirch2]

Economic growth? Then it[stimulus] most certainly does work. The government could simply borrow money to hire all the unemployed, thats certainly possible.

actually if true, economists would know it and unemployment would be obsolete. If you tax an employer with a $50k real job to create a $50k make-work job you have merely lost one real job and gained one welfare make work job. But the economy would crater because the make work job doesn't produce anything. Then, more become unemployed and more make work jobs are necessary, in the liberal mind anyway, until you have a soviet standard of living.

Are you really this stupid?

Thats not how government revenue and taxation works you retard. Money that the government spends isnt directly taken from other workers.

" If you tax an employer with a $50k real job to create a $50k make-work job you have merely lost one real job and gained one welfare make work job."

NOT HOW IT WORKS!!!!

If the government wanted to borrow money, and take on debt, to hire everyone it could. That would not come at the expense of current workers, because its borrowed, not taxed immediately.

Again, the wisdom of doing that is debatable because it increases debt, and thats why i launch in to a whole tirade on that debate afterwards. But the government certainly can hire all the unemployed without causing other people to lose their jobs immediately, like you somehow think is would happen.

 

[cbirch2]

The central point is that the banks were allowed to over leverage and apparently cant be trusted to act rationally.

what? you presume a liberal bureaucrat regulator knows what leverage is correct? Some customers want high leverage and high return, while others don't. How could a silly liberal guess at what leaverage is correct? Its a laughable concept.

Moreover, idiotic liberal regulators were the ones who said leverage in housing was fine because it was so safe while leverage in other areas , that were actually much safer, required higher leverage. To this day liberals still pretend they know what capital requirements are optimal.

Who can say with a straight face that Fanny Freddie subversion the the Republican free market did not cause the current housing crisis?

lol

Some customers want high leverage and high return, while others don't.

Yea, you dont know what leverage is.

A bank itself has leverage, equity:assets, it does not "give high leverage to some customers", or however you think the word should be used. The general principle of a bank is the higher leverage the more income. Regulators arent choosing leverage you idiot, theyre setting upper limits.

Lehman was leveraged 33:1, is it not the role of regulators to ensure that the 4th largest investment bank in the country doesnt make such an idiotic mistake??

Who can say with a straight face that Fanny Freddie subversion the the Republican free market did not cause the current housing crisis?

Who can say with a straight face that it did? Mortgages did not originate at the GSE, they simply provided liquidity to the system, so the banks are still the ones issuing the bad loans. Besides, most mortgages were owned by private institutions, and the number of mortgages owned by fannie and freddie decreased as the bubble grew.

Fannie and freddie are nice scapegoats for conservative anti-government ideology, but you cant and wont find me one set of data that says fannie/freddie were the cause of this crisis.

 

[Euro]

Its money that would otherwise be saved under a mattress or in a savings account.

In the private sector its a life or death matter on which you bet your career everyday.

Liberals bureaucrats on the other hand have no skin in the game they are merely lazy bureaucrats on a fixed income who cant be fired. They could not survive in the private sector. They merely play with other peoples money, and, they have a monopoly to boot. That means no competition.

In short, the government wastes money in a very soviet or Greek way while life and death competitive capitalism invests it sustainably to produce real economic growth and prosperity.

The private sector can’t work without a good public sector. E.g buidling roads,infrastructure,education etc.
To have a good private sector you also need a good public sector. E.g. if you run an export industry you would like to have a good effective infrastrucure and skilled labour. Good infrastruture limits the transportation costs and time is saved and costs, skilled labour makes your company more productive.

So it’s not a public sector vs. private sector, to have strong private sector you also need to have a strong public sector.

But it’s a matter of what services the public sector produces. The private sector must work with the public sector not against it, the same for public sector it must work with the private sector not against it. An efficient and good public sector producing great infrastructure and skilled labour for the private sector is benficial.

They put it in banks where professionals invest it in sustainable ways to grow the economy or they lose their jobs and customer

Short-time profitt just selling and buying to get a quick profitt is’nt sustainable. What you need is more mature capitalism, not just banks investing in papers hoping for a quick profitt. More mature capitalism, investing in real things, building infrastructure,ships,roads,better schools,trains,airports,bridges,tunnels.

Just letting a bank investing in a peace of paper hoping to make quick profitt want do much good in the long run.

 

[cbirch2]

Its money that would otherwise be saved under a mattress or in a savings account.

In the private sector its a life or death matter on which you bet your career everyday.

Liberals bureaucrats on the other hand have no skin in the game they are merely lazy bureaucrats on a fixed income who cant be fired. They could not survive in the private sector. They merely play with other peoples money, and, they have a monopoly to boot. That means no competition.

In short, the government wastes money in a very soviet or Greek way while life and death competitive capitalism invests it sustainably to produce real economic growth and prosperity.

The private sector can’t work without a good public sector. E.g buidling roads,infrastructure,education etc.
To have a good private sector you also need a good public sector. E.g. if you run an export industry you would like to have a good effective infrastrucure and skilled labour. Good infrastruture limits the transportation costs and time is saved and costs, skilled labour makes your company more productive.

So it’s not a public sector vs. private sector, to have strong private sector you also need to have a strong public sector.

But it’s a matter of what services the public sector produces. The private sector must work with the public sector not against it, the same for public sector it must work with the private sector not against it. An efficient and good public sector producing great infrastructure and skilled labour for the private sector is benficial.

They put it in banks where professionals invest it in sustainable ways to grow the economy or they lose their jobs and customer

Short-time profitt just selling and buying to get a quick profitt is’nt sustainable. What you need is more mature capitalism, not just banks investing in papers hoping for a quick profitt. More mature capitalism, investing in real things, building infrastructure,ships,roads,better schools,trains,airports.

Just letting a bank investing in a peace of paper hoping to make quick profitt want do much good in the long run.

Thank you.

 

[EdwardBaiamonte]

The private sector can’t work without a good public sector. E.g building roads,infrastructure,education etc.

what???? even an idiot liberal bureaucrat can "built" a road when he can hire a private sector company in a competitive bidding process to actually built it. The private sector, in contrast, has infinite competencies that are honed every day in a survival of the fittest world wide market place. We got from the stone age to here because private companies invented things, not because government did. Indeed government record is that of our greatest enemy throughout history. NO you know why American was designed to be free of liberal government.

Baiamonte: "They put it in banks where professionals invest it in sustainable ways to grow the economy or they lose their jobs and customer."

Short-time profit just selling and buying to get a quick profit isn't sustainable.

you've got banks confused with stock speculators. Banks make loans to commercial real estate and business, for example! Typical liberal.