Thread: Why Keynesian Stimulus Fails

Originally Posted by Daktoria

...so reforms followed the panic, they didn't solve the panic.

I'm not quite sure what you're asking here, but I'll say that once the New Deal put in place regulations on commercial and investment banks, panics ended. So, after the panics, the regulations ended panics in banking since the 1930s.

Originally Posted by Daktoria

That's nonsense. Demand was satisfied from the war's necessity.

So, you agree the deficit spending worked to grow demand and grow employment.

Originally Posted by Daktoria

As for not starting the war, that's nonsense as well. When people don't think in themselves because the government's thinking for them, it means they're going to have "abuse of process" become a regular part of life.

The longer this lasts, the longer it builds up. People either have internal breakdowns of social fabric, or international conflicts of release.

You'd be hard pressed to prove that Keynesian economic policy caused a war. My point is that the spending ended high unemployment.

Originally Posted by Shanty

I'm not quite sure what you're asking here, but I'll say that once the New Deal put in place regulations on commercial and investment banks, panics ended. So, after the panics, the regulations ended panics in banking since the 1930s.

Unless you're presenting psychopathy, schizophrenia, or borderline personality disorder, I'm not sure how you think this is a valid argument.

The 1930s were after the Panic of 1907. Your argument suggests a lack of sense of time.

So, you agree the deficit spending worked to grow demand and grow employment.

Sure, but atrocious demand and employment. Putting the country to war is not respectful of its people.

You'd be hard pressed to prove that Keynesian economic policy caused a war. My point is that the spending ended high unemployment.

There's nothing hard pressed about acknowledging the psychological foundation of how people live, work, think, and feel.

Central planning displaces people's attention spans. Therefore, they become irrational and support irrational policies.

Originally Posted by Daktoria

Unless you're presenting psychopathy, schizophrenia, or borderline personality disorder, I'm not sure how you think this is a valid argument.

The 1930s were after the Panic of 1907. Your argument suggests a lack of sense of time.

Perhaps it's you who's got the mental illnesses.

Letr's review for the slow kids and you to catch up.

*I* did not bring up the bank failures of 1907. I am making a point that it took many years to get from those bank runs, to the creation of the Federal Reserve Act, and then further reforms of banking in the New Deal era. Apparently, you can't keep up with normal human communication, but I'm willing to talk down to you to get you up to speed.

Originally Posted by Daktoria

Sure, but atrocious demand and employment. Putting the country to war is not respectful of its people.

The spending was a result of war (you already agreed that's true in a previous post of yours). And sometimnes war comes no matter how much effort is put into avoiding it. But the spending in no way started a war.

Originally Posted by Daktoria

There's nothing hard pressed about acknowledging the psychological foundation of how people live, work, think, and feel.

Central planning displaces people's attention spans. Therefore, they become irrational and support irrational policies.

Maybe there's some sort of Central Planning in your posts, because they are becoming clear as being irrational. You don't seem to have a grasp on reality. This was not a thread about Marxist Central Planning ideas (which failed as bad as total and complete Laissez Faire does, as history has shown). It's a thread about Keynesian.

Originally Posted by Daktoria

You're assuming that effect is real, not nominal. Expanding the money supply can also lead to inflation by definition of MV=PT.

Less so, in terms of direct effect. "Money supply" is increased through discount rates. Lower interest, should increase borrowing, which hopefully gets spent. There are uncertainties, all the way down the line.

Spend X fo Y, and all uncertainty is eliminated. We know exactly what and how much, with every stimulus. However, its effect is hopefully a change in mood, due to the directional change. That's also uncertain, albeit, no more uncertain than stimulus via lower interest.

Originally Posted by Daktoria

If economic mood was a self-fulfilling prophecy, then people could wish money to grow on trees.

The only self-fulfilling prophecy going on is social rejection where those who don't believe in national myths are rejected so liars can exercise authority.

You did not understand the metaphor. Thus your similie is both off the mark and rife with empty rhetoric.

Originally Posted by Shanty

Perhaps it's you who's got the mental illnesses.

Letr's review for the slow kids and you to catch up.

*I* did not bring up the bank failures of 1907. I am making a point that it took many years to get from those bank runs, to the creation of the Federal Reserve Act, and then further reforms of banking in the New Deal era. Apparently, you can't keep up with normal human communication, but I'm willing to talk down to you to get you up to speed.

...so in other words, you interrupt and merely insist on carrying on a tangent to divert attention.

The spending was a result of war (you already agreed that's true in a previous post of yours). And sometimnes war comes no matter how much effort is put into avoiding it. But the spending in no way started a war.

Again, schizophrenic. WW2 followed the Great Depression, and war is not a guarantee. Encouraging irrational attitudes, however, deters conflict resolution.

Maybe there's some sort of Central Planning in your posts, because they are becoming clear as being irrational. You don't seem to have a grasp on reality. This was not a thread about Marxist Central Planning ideas (which failed as bad as total and complete Laissez Faire does, as history has shown). It's a thread about Keynesian.

Another tangent?

Originally Posted by Koios

Less so, in terms of direct effect. "Money supply" is increased through discount rates. Lower interest, should increase borrowing, which hopefully gets spent. There are uncertainties, all the way down the line.

Spend X fo Y, and all uncertainty is eliminated. We know exactly what and how much, with every stimulus. However, its effect is hopefully a change in mood, due to the directional change. That's also uncertain, albeit, no more uncertain than stimulus via lower interest.





You did not understand the metaphor. Thus your similie is both off the mark and rife with empty rhetoric.

Appeals to self-authority do not, an argument, make.

Describing freshman monetary policy is also insulting, and you're arrogant to claim we know exactly how the money supply expands. It's impossible to calculate with certainty the money multiplier because we don't know in advance how many times borrowing will recycle.

More extraordinary returns: Public investments outside of

Stimulus works.

Originally Posted by Shanty

More extraordinary returns: Public investments outside of

Stimulus works.

Does the study break down investments by geographic area, or does it simply conflate successful regions with failing regions?

For example, I'm not sure how claiming public education spending is successful makes sense when conflating previously affluent white suburban school districts with previously failing black inner city counterparts. Meshed together, it'll appear that public spending is the key, but analyzed apart, "No Child Left Behind" policies reveal their inner character.

Originally Posted by Daktoria

...so in other words, you interrupt and merely insist on carrying on a tangent to divert attention.

No. You were falling behind and showing confusion because you couldn;t keep your facts straight. I have straightened them out for you. You're welcome.

Originally Posted by Daktoria

...Again, schizophrenic. WW2 followed the Great Depression, and war is not a guarantee. Encouraging irrational attitudes, however, deters conflict resolution.

I see your ploy. But is this you acting retarded, or being retarded? You haven't shown that the war was caused by the Depression.

Originally Posted by Daktoria

...Another tangent?

Again, your confusion is evident. This was a follow up from one of your schizophrenic tangents. You brought central planning into a thread about Keynesian failures.

So far, the only Keynesian failures to be shown are that people like you refuse to shed their ignorance. But that's more a failure of Daktoria, than Keynes, Hicks, Stiglitz, Shiller, etc.

Originally Posted by Claudius the God

Somewhere in your analysis of Keynes you stopped reading him and interjected your own personal views. Aggregate demand is simply an equation describing the economy. It is a simple one and not really something economists have disagreements on.

Horseshit. Any good economist will tell you there's no such thing as aggregate demand and that it is at best an estimate (an "indicator") of economic activity. The reason it's not a good metric is because it can't be traced. It's non-linear, and the problem is that all the Keynesian math simplifies it into a linear operator. You go ask any physicist what happens when you do that, and when they're done laughing, you'll have your explanation.

The issue is not in the overall equation but in how you make the sum total increase or decrease. If you do nothing and demand drops, then the economy slows down. If you think doing nothing is the proper way to run a national economic policy then vote for Romney. He is your man. If you think the government (fiscal and monetary policy) have a responsibility to actually do something about the economy, vote for Obama. But whichever side you fall on, your analysis of Keynes is completely wrong. I would bet you have absolutely no background in economics at all and took this stuff directly from a Mizes site or from some Rand Paul piece you read. I could be wrong but I doubt it.

Keynesians are scared to death of the Austrian School. Why is that?