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Thread: Corbyn proves folk understand economics

  1. #21
    Scucca Æthelfrith's Avatar
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    Quote Originally Posted by RNG View Post
    But it doesn't ignore the basic truth that so many on the left ignore. Debts have to be paid at some point.

    Quite some time ago the Canadian government started advertising the fact that 25% of tax revenue was being spent on servicing debt. That was amazing. People started accepting the need for more taxes and less spending. Please note, increased tax AND decreased spending. It worked.

    The Province of Alberta did a similar thing, eliminated its debt and then was able to reduce taxes.

    Things cost and must be paid back. Talk equilibria and complexities all you want but those are basic facts.
    "Debt has to be paid back at some point" is essentially assuming the pie remains the same and that the Government operates in the same way as Auntie Mildred. It doesn't. You've essentially completely ignored Keynesianism and threw in "that's the reality" as if it will help cover the knowledge hole. It won't.

    I'll talk equilibria as its a key element. There is no magic self-regulation. There will be hysteresis in unemployment. Any "we have to pay it back" austerity cobblers will just increase the risk of the economy of being stuck in an inefficient equilibrium where people suffer and right wingers whistle.
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  2. #22
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    Quote Originally Posted by Æthelfrith View Post
    "Debt has to be paid back at some point" is essentially assuming the pie remains the same and that the Government operates in the same way as Auntie Mildred. It doesn't.

    I'll talk equilibria as its a key element. There is no magic self-regulation. There will be hysteresis in unemployment. Any "we have to pay it back" austerity cobblers will just increase the risk of the economy of being stuck in an inefficient equilibrium where people suffer and right wingers whistle.
    A lot of state and municipal governments in this country are run by right wingers, and a lot of right wingers see problems with their state and local budgets and assume the same applies at the federal level. It doesn't, and it will be challenging for people to really grasp that. How do you think your personal approach to helping them grasp it is going so far? Seeing good results?

    Would you show up at a city council meeting where population and tax revenues are declining and warn them of the evils of austerity and tell them to increase their deficit spending? Would you address a state legislature whose pension fund is currently at a 50% funded level and tell them to increase their pension promises?
    Last edited by Neomalthusian; 11th June 2017 at 10:58 AM.

  3. #23
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    Quote Originally Posted by Æthelfrith View Post
    "Debt has to be paid back at some point" is essentially assuming the pie remains the same and that the Government operates in the same way as Auntie Mildred. It doesn't. You've essentially completely ignored Keynesianism and threw in "that's the reality" as if it will help cover the knowledge hole. It won't.

    I'll talk equilibria as its a key element. There is no magic self-regulation. There will be hysteresis in unemployment. Any "we have to pay it back" austerity cobblers will just increase the risk of the economy of being stuck in an inefficient equilibrium where people suffer and right wingers whistle.
    Equilibria and hysteresis. Wow. There is no magic self-regulation. Double wow.

    So if debt payments start reaching 50% of revenue, you're good with that too? Or will your magic hysteresis some how dissipate all that debt into nothingness.

    Most people call that default.

  4. #24
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    Quote Originally Posted by RNG View Post
    Equilibria and hysteresis. Wow. There is no magic self-regulation. Double wow.

    So if debt payments start reaching 50% of revenue, you're good with that too? Or will your magic hysteresis some how dissipate all that debt into nothingness.

    Most people call that default.
    Nothing particularly wow at using economics when referring to economics. The problem is that you haven't referred to any valid analysis. You've essentially implied 'austerity is right', despite it having no valid economic backbone.

    Debt payments increase with austerity. You've ignored that. Debt payments also decline in relative importance as sustainable growth is achieved. You've ignored that too.

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    Quote Originally Posted by RNG View Post
    Equilibria and hysteresis. Wow. There is no magic self-regulation. Double wow.

    So if debt payments start reaching 50% of revenue, you're good with that too? Or will your magic hysteresis some how dissipate all that debt into nothingness.

    Most people call that default.
    Indeed, at the end of the day, the EU os colkectivelu stuck in a perpetual 'Great Recession'

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    Quote Originally Posted by publius3 View Post
    Indeed, at the end of the day, the EU os colkectivelu stuck in a perpetual 'Great Recession'
    Imagine low poverty rates and higher self-employment rates? Scary stuff!

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    Quote Originally Posted by Æthelfrith View Post
    Imagine low poverty rates and higher self-employment rates? Scary stuff!
    Except both claims are false. The US has a lower poverty rate as a whole than the EU and that doesn't even account for the tendency in the EU to measure poverty post-subsidy whereas the US measure is pre-subsidy. (There are people in the US who, making 60% of the median in the US are counted as poor but still making more than the median, in say, Portugal.) The US has higher rate of entrepreneurialship and higher income. This shouldn't be surprising, the EU as a whole has 9.5% unemployment and approximately 1/3 less income per capita. The EU rates approcimately on par with the bottom quintile of US states. Indeed, as noted, the EU is essentially stuck in recession, a genuine government-imposed malaise.
    Last edited by publius3; 12th June 2017 at 01:22 PM.
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  8. #28
    Junior Member Claudius the God's Avatar
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    Quote Originally Posted by RNG View Post
    Equilibria and hysteresis. Wow. There is no magic self-regulation. Double wow.

    So if debt payments start reaching 50% of revenue, you're good with that too? Or will your magic hysteresis some how dissipate all that debt into nothingness.

    Most people call that default.
    A nation that owes debt in it's own currency can never default on the debt. That is like saying the subway owners ran out of tokens to sell.

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    Quote Originally Posted by Claudius the God View Post
    A nation that owes debt in it's own currency can never default on the debt. That is like saying the subway owners ran out of tokens to sell.
    That's just the acknowledgment that the government can pay debts by printing money. In fact why should the nation even bother to borrow at all then? Why not just cut to the chase and create money to make up any shortfall to begin with?
    Last edited by publius3; 12th June 2017 at 01:35 PM.

  10. #30
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    Quote Originally Posted by Claudius the God View Post
    A nation that owes debt in it's own currency can never default on the debt. That is like saying the subway owners ran out of tokens to sell.
    Ah, the favorite strategy of Venezuela and Zimbabwe.

    Who cares about debt? Wasn't it Cheney who said deficits don't matter?
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