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Thread: Corbyn proves folk understand economics

  1. #31
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    Quote Originally Posted by RNG View Post
    Ah, the favorite strategy of Venezuela and Zimbabwe.

    Who cares about debt? Wasn't it Cheney who said deficits don't matter?
    Indeed whoever is sitting in the driver's seat of fiscal policy suddenly loses their fiscal backbone and the passenger invariably becomes a deficit hawk. Its not to be believed really.

  2. #32
    Scucca Ęthelfrith's Avatar
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    Quote Originally Posted by publius3 View Post
    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.
    Seems like you're unaware of your own country. Poverty analysis is available via Smeeding. He fixed the poverty rate according to the US definition. Only the Brits, another neoliberal country, can compete. The self-employment figures are freely available via the OECD. Of course you would typically go further than that: looking at the difference between the actual rate and the desired rate (based on people who want to be self-employed). That distinction tends to be lower in countries with more generous safety nets. Encourages risk taking!
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  3. #33
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Ęthelfrith View Post
    You're misinterpreting Keynes' message. That focused on the folly on the supposed self correcting mechanisms of capitalism (such that active fiscal policy will protect human capital and therefore ensure future tax revenues). Analysis since has focused on the likes of multiple equilibria and how active policy can prevent an inferior equilibrium from developing. The "we have to pay it back when the business cycle turns" line is deliberately ignoring the complexity of Keynesian analysis
    Hardly.

    Keynes: "The boom, and not the slump, is the time for austerity".

    Keynes himself is the glorious refutation of your argument. Why not let the man speak for himself?
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  4. #34
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by tnbskts View Post
    I think taking all of it was sort of the object of the exercise. Then she had to go and call an election, and regular people decided they'd had enough of giving their money to CEOs and financiers. No wonder democracy isn't popular with the financial elite.
    No, the financial elite are fine with democracy, so long as 'the people' elect the right candidate. But the men who smoke cigars do NOT like riots.

  5. #35
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Claudius the God View Post
    You forgot one giant difference between a state and a nation that has fiat money, the state cannot make money, the nation that backs the money can make it out of thin air any time it wants. Think of the debt payments as interest paid to bondholders by a government that decided not to tax in order to spend and is willing to pay interest on money it made out of thin air just for the hell of it. The government owes bond holders money it creates itself. Our government is not a household which is why it never really has to balance payments in a fiat system. I know it sounds weird but that is reality.
    Herbert Hoover: Blessed are the young, for they shall inherit the national debt.

  6. #36
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by labrea View Post
    Blast from the past:


    Want a Tax Cut? You Bet. Well, Maybe Not. - The New York Times
    It was the republican president, and congress that choose tax cuts over debt reduction, and making Medicare, and social security solvent for decades to come.
    Yes. 2001 was when America made a decidedly wrong turn. I blame the SCOTUS.

    The 2000's were a decade when America should have been paying down debt, to prepare for the looming en masse retirement of the Baby Boomers. Instead, we threw a wild party, fueled by the Bush tax cuts, and Alan Greenspam kept spiking the punchbowl, instead of taking it away, which is what a central banker is SUPPOSED to do.
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  7. #37
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Ęthelfrith 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.
    As I pointed out, Keynes himself disagrees with your interpretation of his writings. Many years back, when I was a much younger grad student in Economics, I read a paper titled "Was Keynes a Keynesian?" Sounds like a silly question, like asking who is buried in Grant's tomb. It is actually a very good question, as to whether Keynes would agree with many of his disciples today. It is not clear that Keynes wanted the government responding to EACH and EVERY little fluctuation in the business cycle. It may very well be that he really meant his ideas should be reserved for the truly serious economic downturns, when the economy CAN get trapped in a high-unemployment-equilibrium. The kind of situation we experienced in 1929-1933 and in 2008-2010.

    And he certainly was NOT advocating endless budget deficits, in good times as well as bad. If you think he was, it is YOU who is seriously misinterpreting Keynes.
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  8. #38
    Radical Centrist BigLeRoy's Avatar
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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.
    Donald Trump: "We'll borrow, and if the economy crashes, we'll make a deal."

  9. #39
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    Quote Originally Posted by BigLeRoy View Post
    As I pointed out, Keynes himself disagrees with your interpretation of his writings. Many years back, when I was a much younger grad student in Economics, I read a paper titled "Was Keynes a Keynesian?" Sounds like a silly question, like asking who is buried in Grant's tomb. It is actually a very good question, as to whether Keynes would agree with many of his disciples today. It is not clear that Keynes wanted the government responding to EACH and EVERY little fluctuation in the business cycle. It may very well be that he really meant his ideas should be reserved for the truly serious economic downturns, when the economy CAN get trapped in a high-unemployment-equilibrium. The kind of situation we experienced in 1929-1933 and in 2008-2010.

    And he certainly was NOT advocating endless budget deficits, in good times as well as bad. If you think he was, it is YOU who is seriously misinterpreting Keynes.
    The real debate over Keynes analysis is two fold. First, the extent that neo-Keynesianism has misinterpreted the macroeconomic approach (in a bid to make it compatible with neoclassical microeconomics). Second, the extent that Keynes was able to embed behavioural concepts within his approach (using that to reject old physics).

    The truth of course is that he provided an important framework to study the economy, shifting the emphasis away from perceived self regulation. It's the post-Keynesians that have taken it further. For example, without direct reference to Marxism, they are able to appreciate various factors threatening economic crisis. Together with analysis into multiple equilibria, this necessarily widens the debate into optimal fiscal policy.

    Now you might want to hide from the development of economic thought. You'd have to if, like RNG, you want to support austerity.

  10. #40
    Scucca Ęthelfrith's Avatar
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    Quote Originally Posted by BigLeRoy View Post
    Hardly.

    Keynes: "The boom, and not the slump, is the time for austerity".

    Keynes himself is the glorious refutation of your argument. Why not let the man speak for himself?
    Basic error here! Keynes wasn't applying austerity as right wingers apply it with their blubbering over debt. Keynes was referring to the dangers of overheating and inflationary pressures: 'to protect us from the excesses of the boom and, at the same time, put us in good trim to ward off the cumulative dangers of the slump when the reaction comes, as come it surely will'. That can't be used here as austerity is used within the context of neoliberalism. It's an ideological reaction, rather than any sensible reference to macroeconomic stabilisation.

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