Keynes vs Hayek

[EdwardBaiamonte]

since the problems with the economy were after the great tax decrease,

too stupid!!! Reagan got elected because there were huge problems with the economy under Carter!!

 

[Norman]

Interesting definition. Combined with high deficits?? Sorry. A stimulus is a stimulus with or without a deficit. A stimulus may increase a deficit, in the short term. And it may be aimed at decreasing the deficit over time.
Low interest rates? Sure, though in general, in times of a down economy, low interest rates are not part of a stimulus package, which is generally based on fiscal issues. Here is a definition:
n economics, fiscal policy is the use of government expenditure and revenue collection to influence the economy..
en.wikipedia.org/wiki/Economic_stimulus

Stimulus can be defined differently. However in this kind of case I think it's stupid to label fiscal stimulus as anything else than deficit spending (Whether it be tax cuts or spending hikes). Or monetary stimulus as anything else than expansive monetary policy. It doesn't really matter if road construction scheme is labeled as "stimulus" or "road construction". Of course we can debate wether some type of deficit spending is wiser than a other type.

So, by your definition, we should do nothing at all with recessions. But repubs and dems do not agree, me boy. Almost all repubs say that we need to cut taxes and gov spending to get out of the unemployment problem we have today. I simply asked if you or anyone could name a time when that worked. So, since you think that all recessions just come and go (and they will, given time) you may want to take a look at the Reagan presidency. Remember that he decreased taxes greatly in his first year. And cut gov spending greatly also. Was supposed to take care of the relatively minor recession we were in at that time. But, unemployment went up quickly. Got to 10.8%, which is to this day the highest unemployment rate since the great depression. So, his admin then borrowed more money than all the presidents before him combined, and thereby tripled the national debt. And, he raised taxes 11 times. AND used the money raised by those two methods for stimulus spending. Which worked. By the way, he did not use tax cuts and decreasing gov spending to get out of the financial recession resulting from cutting taxes and decreasing gov spending, he used stimulus spending.

I just took a look at the Reagan presidency, spending went up every year. Looks like you haven't looked at the numbers yourself so I am not going to look any further. In any case it's stupid to pin something complicated like economy to one or two variables. There could have been many things that happened completely outside of monetary or fiscal policy.

So, that is just history. You need to know what you are talking about before you suggest someone is biased. And yes, tax decreases can be stimulative, depending. that is a whole other issue.

I find it pretty funny that you haven't even looked at the numbers yourself and claim to not be biased.

 

[Rshermr]

Interesting definition. Combined with high deficits?? Sorry. A stimulus is a stimulus with or without a deficit. A stimulus may increase a deficit, in the short term. And it may be aimed at decreasing the deficit over time.
Low interest rates? Sure, though in general, in times of a down economy, low interest rates are not part of a stimulus package, which is generally based on fiscal issues. Here is a definition:
n economics, fiscal policy is the use of government expenditure and revenue collection to influence the economy..
en.wikipedia.org/wiki/Economic_stimulus

Stimulus can be defined differently. However in this kind of case I think it's stupid to label fiscal stimulus as anything else than deficit spending (Whether it be tax cuts or spending hikes). Or monetary stimulus as anything else than expansive monetary policy. It doesn't really matter if road construction scheme is labeled as "stimulus" or "road construction". Of course we can debate wether some type of deficit spending is wiser than a other type.

So, by your definition, we should do nothing at all with recessions. But repubs and dems do not agree, me boy. Almost all repubs say that we need to cut taxes and gov spending to get out of the unemployment problem we have today. I simply asked if you or anyone could name a time when that worked. So, since you think that all recessions just come and go (and they will, given time) you may want to take a look at the Reagan presidency. Remember that he decreased taxes greatly in his first year. And cut gov spending greatly also. Was supposed to take care of the relatively minor recession we were in at that time. But, unemployment went up quickly. Got to 10.8%, which is to this day the highest unemployment rate since the great depression. So, his admin then borrowed more money than all the presidents before him combined, and thereby tripled the national debt. And, he raised taxes 11 times. AND used the money raised by those two methods for stimulus spending. Which worked. By the way, he did not use tax cuts and decreasing gov spending to get out of the financial recession resulting from cutting taxes and decreasing gov spending, he used stimulus spending.

I just took a look at the Reagan presidency, spending went up every year. Looks like you haven't looked at the numbers yourself so I am not going to look any further. In any case it's stupid to pin something complicated like economy to one or two variables. There could have been many things that happened completely outside of monetary or fiscal policy.

So, that is just history. You need to know what you are talking about before you suggest someone is biased. And yes, tax decreases can be stimulative, depending. that is a whole other issue.

I find it pretty funny that you haven't even looked at the numbers yourself and claim to not be biased.

So, norman says:

I find it pretty funny that you haven't even looked at the numbers yourself and claim to not be biased.

You say it is funny. Not sure what you think it is. I have indeed looked at the numbers. Many, many times. So, which numbers do you have in mind. Unemployment???
The unemployment rate in January of 1981 was 7.5% That was the month that Reagan took office.
The highest rate for a single month is shared by November and December of 1982 with an unemployment rate of 10.8%. November was 17 months after Reagans tax decrease. If you wonder why, you just need to think about it. Or, if you would like, I can explain it to you. But the economic history is out there, if you confine yourself to impartial sources.
These numbers came from:
Historical Unemployment Rates in the United States
The site is non partisan. All figures come from the U.S. Department of Labor: Bureau of Labor Statistics

So, if you have a problem with what I stated, find a source. You are posting opinion. And there is no reason to believe your opinion, just as there is no reason to believe mine. But facts don't lie. Do you have any? If so, state them and back them up with an impartial source.

Seems to me we are arguing as to whether Keynsian economics has any validity. I say, as do most economists, that it does indeed. Has shortcomings, as all economic theories do. But the alternative being argued on this post is supply side economics, which I argue has never worked. And you call that prejudiced. Sorry, me boy, it is simply the facts as I have been able to research them. If you have other facts, prove me wrong.

 

[EdwardBaiamonte]

The highest rate for a single month is shared by November and December of 1982 with an unemployment rate of 10.8%. November was 17 months after Reagans tax decrease. If you wonder why, you just need to think about it.

How can a super dummy liberal make anyone think??
Exactly how stupid is it to look at only the variable that you like while willfully ignoring the ones that easily contradict your idiotic feelings.


"The early 1980s recession was a severe recession in the United States which began in July 1981 and ended in November 1982.[2][3] The primary cause of the recession was a contractionary monetary policy established by the Federal Reserve System to control high inflation."[4] wikipedia

See why we are 100% positive a liberal will be slow, very very slow.

 

[EdwardBaiamonte]

supply side economics, which I argue has never worked. .

of course that's 100% idiotic and stupid and liberal. America has supplied the most goods and services and has had the most supply side economics or capitalism in human history!!

See why we are 100% positve a liberal will be slow.

 

[Norman]

Interesting definition. Combined with high deficits?? Sorry. A stimulus is a stimulus with or without a deficit. A stimulus may increase a deficit, in the short term. And it may be aimed at decreasing the deficit over time.
Low interest rates? Sure, though in general, in times of a down economy, low interest rates are not part of a stimulus package, which is generally based on fiscal issues. Here is a definition:
n economics, fiscal policy is the use of government expenditure and revenue collection to influence the economy..
en.wikipedia.org/wiki/Economic_stimulus

Stimulus can be defined differently. However in this kind of case I think it's stupid to label fiscal stimulus as anything else than deficit spending (Whether it be tax cuts or spending hikes). Or monetary stimulus as anything else than expansive monetary policy. It doesn't really matter if road construction scheme is labeled as "stimulus" or "road construction". Of course we can debate wether some type of deficit spending is wiser than a other type.



I just took a look at the Reagan presidency, spending went up every year. Looks like you haven't looked at the numbers yourself so I am not going to look any further. In any case it's stupid to pin something complicated like economy to one or two variables. There could have been many things that happened completely outside of monetary or fiscal policy.



I find it pretty funny that you haven't even looked at the numbers yourself and claim to not be biased.

So, norman says:

I find it pretty funny that you haven't even looked at the numbers yourself and claim to not be biased.

You say it is funny. Not sure what you think it is. I have indeed looked at the numbers. Many, many times. So, which numbers do you have in mind. Unemployment???
The unemployment rate in January of 1981 was 7.5% That was the month that Reagan took office.
The highest rate for a single month is shared by November and December of 1982 with an unemployment rate of 10.8%. November was 17 months after Reagans tax decrease. If you wonder why, you just need to think about it. Or, if you would like, I can explain it to you. But the economic history is out there, if you confine yourself to impartial sources.
These numbers came from:
Historical Unemployment Rates in the United States
The site is non partisan. All figures come from the U.S. Department of Labor: Bureau of Labor Statistics

So, if you have a problem with what I stated, find a source. You are posting opinion. And there is no reason to believe your opinion, just as there is no reason to believe mine. But facts don't lie. Do you have any? If so, state them and back them up with an impartial source.

Seems to me we are arguing as to whether Keynsian economics has any validity. I say, as do most economists, that it does indeed. Has shortcomings, as all economic theories do. But the alternative being argued on this post is supply side economics, which I argue has never worked. And you call that prejudiced. Sorry, me boy, it is simply the facts as I have been able to research them. If you have other facts, prove me wrong.

You can check US government spending.com for spending and tax revenue. The tax cuts didn't really decrease the revenue, and the spending never went down. With those facts unemployment rate is irrelevant. You are wrong.

Unemployment is cyclic and can be due to many reasons, often with way longer history of inbalances than instant tax cuts. It is simply completely retarded to believe tax cuts cause unemployment spikes and recessions. In fact that goes against your thesis of stimulus helping recessions, since tax cuts are used for demand stimulus just like the government infra projects.

I bet you can't find an employer who states "Jeez, if only could I pay more taxes I do hire the guy". Obviously there is the crowding out of effect of deficit spending though. I am not arguing for tax cuts since the deficit is so enormous, but it's pretty dishonest to think that employers don't employ because taxes aren't high enough.


Do you have any proof that Reagan recession happened because of the tax cuts rather than despite of them? Because such small tax cuts can't in no way cause such recession. My bet is that it was just a recession that came and went despite the minute 1% changes to the tax revenue.

 

[EdwardBaiamonte]

Do you have any proof that Reagan recession happened because of the tax cuts .

I think its universally agreed upon that 20% interest rates caused the Reagan recession!

It's a little fact that Rshemer likes to ignore in the course of trumpeting how wonderful and impartial his idiotic liberalism is.

He has the character and IQ of a liberal for sure.