patrick.net

I will take you mutt's silence to indicate tacit agreement ;)

http://www.cyniconomics.com/2013/11/16/technical-notes-for-bad-news-for-keynesians/

egads101 says

A more accurate comparison? the US versus southern europe. We have grown for 3+ years now, precisely because we have NOT (despite all of the GOP's efforts) followed southern europe into intensive spending and service cuts at precisely the worst time in history.

... And because we can print our way around it (consequences be damned) while southern Europe can no longer do so...

If we couldn't print our own currency and overspend by more than a third of the annual budget for an ENTIRE OBAMA PRESIDENCY we'd be in the exact same boat! Except that housing would be affordable now, and the economy would be in recovery, rather than slipping slowly towards irretrievable stagnation. Our money would be worth more or less the same as before, our debt would be less, and things would be turning around.

Quigley says

and the economy would be in recovery,

I don't understand this line of thinking. Why in the world do you think the economy would have recovered more quickly??

tatupu70 says

I don't understand this line of thinking. Why in the world do you think the economy would have recovered more quickly??

Look at Iceland for answers.

Paralithodes says

southern europe into intensive spending and service cuts at precisely the worst time in history.

By that, do you mean this?
>>
The Spanish government requires that any resident with an overseas asset worth more than €50,000 and who lives in Spain at least six months (183 days) of the year is affected – and must declare what they own abroad.

Failure to declare or any errors in any of the 720 online forms will result in a penalty of €10,000 or more.

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2317127/Expats-head-home-Spain-forced-declare-overseas-assets.html#ixzz2kw8ScoPf
Follow us: @MailOnline on Twitter | DailyMail on Facebook

gsr says

Look at Iceland for answers.

Completely different scenario.

Quigley says

If we couldn't print our own currency and overspend by more than a third of the annual budget for an ENTIRE OBAMA PRESIDENCY we'd be in the exact same boat! Except that housing would be affordable now, and the economy would be in recovery, rather than slipping slowly towards irretrievable stagnation. Our money would be worth more or less the same as before, our debt would be less, and things would be turning around.

Agreed.

tatupu70 says

Quigley says

and the economy would be in recovery,

I don't understand this line of thinking. Why in the world do you think the economy would have recovered more quickly??

Look at the data provided in that article and you can see..

BGA, the baltic crisis went deep into crisis but recovered fastest with a sound money policy, so did some northern countries (not all went into a full fledged recession). The data is right in front of your eyes.

mell says

Look at the data provided in that article and you can see..

I've looked at the data and don't at all agree with the conclusion. A large budget deficit is usually the result of large issues with the economy and those problems are the CAUSE of both the low growth and the deficit.

Correlation does not equal causation.

tatupu70 says

Completely different scenario.

Please read this if you have not done it already:
http://blogs.telegraph.co.uk/news/danielhannan/100083764/iceland-was-right-not-to-bail-out-its-banks-if-only-we-had-done-the-same/

>>
It's becoming increasingly apparent, though, that Iceland's refusal to bail out its banks – the approach which a handful of free-marketeers vainly urged on the British and American governments – has left that pure and beautiful country poised for a textbook recovery. Even The Economist accepts that Iceland is better placed than Ireland. Now Aditya Chakraborrty, a Guardian leader-writer, argues in Comment is Free that refusing to bail out the banks was economically sensible (let's take it as read that it was morally right).

gsr says

It's becoming increasingly apparent, though, that Iceland's refusal to bail out
its banks – the approach which a handful of free-marketeers vainly urged on the
British and American governments – has left that pure and beautiful country
poised for a textbook recovery. Even The Economist accepts that Iceland is
better placed than Ireland. Now Aditya Chakraborrty, a Guardian leader-writer,
argues in Comment is Free that refusing to bail out the banks was economically
sensible (let's take it as read that it was morally right).

That's a totally different discussion. The article posted is referring to austerity measures--not bailouts.

tatupu70 says

That's a totally different discussion. The article posted is referring to austerity measures--not bailouts.

Not at all, do you know why there are austerity measures? They are there to bail out the bond holders.

tatupu70 says

That's a totally different discussion. The article posted is referring to
austerity measures--not bailouts.

Holding the responsible banks accountable, instead of imposing austerity on the citizens to resolve the effects of the banks' malfeasance, proved to be a VASTLY superior response to the situation, and including it should be something like MANDATORY when discussing austerity as an economic policy option.

gsr says

Not at all, do you know why there are austerity measures? They are there to
bail out the bond holders.

In some cases, but again, that's not the discussion at hand. The OP is saying austerity leads to stronger growth. Which is not the same as saying defaulting leads to stronger growth.

And not all bailouts/defaults are the same. Just because Iceland had a good result does not mean the US would have enjoyed the same.

Automan Empire says

Holding the responsible banks accountable, instead of imposing austerity on
the citizens to resolve the effects of the banks' malfeasance, proved to be a
VASTLY superior response to the situation, and including it should be something
like MANDATORY when discussing austerity as an economic policy option.

I agree. I'm certainly not arguing against that.

tatupu70 says

And not all bailouts/defaults are the same. Just because Iceland had a good result does not mean the US would have enjoyed the same.

It's what the data suggests, that's all.

egads101 says

The US should not have bailed out the TBTF banks,

Record bonuses for bankers in the face of the foreclosure tsunami.
Very corrosive to the nation's sense of social justice. What happens to the nation's conscience when malfeasance at the top is lavishly rewarded?
It has been said that America is a Business, which is bad enough, but to many, now, America looks like a crooked casino.
Grab what you can get away with, baby.

But we can close this thread because apparently what the US and the Fed have been doing and what Krugman has been advocating has nothing to with Keynesians. Good enough for me, no further need to shame Keynes here ;)

http://patrick.net/?p=1234228

Rapacious Capitalism is, overwhelmingly, the main driver of planetary ecological collapse.

For God's sake gentlemen, settle your arguments so we can keep it going!

This growth based boondoggle is the fast track to the Rapture.

mell says

tatupu70 says

Quigley says

and the economy would be in recovery,

I don't understand this line of thinking. Why in the world do you think the economy would have recovered more quickly??

Look at the data provided in that article and you can see..

Mal investment would have been liquidated not propped up, savings rebuilt, rather than increasing debt, dollars invested in the more productive areas of the economy- a natural flow of capital rather than additional created currency thrown at failing industries (banking/insurance) and markets (housing)
Five years later of trying to paper over the problem with more debt has just created asset bubble benefitting the rich

smaulgld says

Mal investment would have been liquidated not propped up, savings rebuilt,
rather than increasing debt, dollars invested in the more productive areas of
the economy- a natural flow of capital rather than additional created currency
thrown at failing industries (banking/insurance) and markets (housing)
Five
years later of trying to paper over the problem with more debt has just created
asset bubble benefitting the rich

That's rich. So, the assumption there is that good investments aren't being made because of lack of capital?? I've got news for you--interest rates are at near historic lows. If there were ANY good investments out there right now, they would be flooded with money.

And please tell me exactly how your theory works. After the economy crashes and unemployment is at 40%, companies are going to all of the sudden say, hey, let's start hiring people and building new plants. Sure, nobody has any money to buy anything, we already have overcapacity, but let's build a new plant and hire! Is that how it works?

tatupu70 says

And please tell me exactly how your theory works. After the economy crashes
and unemployment is at 40%, companies are going to all of the sudden say, hey,
let's start hiring people and building new plants. Sure, nobody has any money to
buy anyting, we already have overcapacity, but let's build a new plant and hire!
Is that how it works?

Thats exactly it. Austrianism is seated in Say's Law. Replace "Capital" with "Labor" in nearly every Austrian theorem and it is a Classical Theory.

mell says

Bad News For Keynesians: Data Shows The Austerians Are Right

Doesn't matter. Keynesianism is a religion. Any facts that disprove its tenets are somehow wrong, biased, or flawed. It does not matter the argument. Keynesianism is unquestionable and everything else is heresy. John Maynard Keynes died for your sins. Have you been saved?

Dan8267 says

Doesn't matter. Keynesianism is a religion. Any facts that disprove its
tenets are somehow wrong, biased, or flawed. It does not matter the argument.
Keynesianism is unquestionable and everything else is heresy. John Maynard
Keynes died for your sins. Have you been saved?

Funny-that's how I'd describe Austrian economic theory.

tatupu70 says

Dan8267 says

Doesn't matter. Keynesianism is a religion. Any facts that disprove its

tenets are somehow wrong, biased, or flawed. It does not matter the argument.

Keynesianism is unquestionable and everything else is heresy. John Maynard

Keynes died for your sins. Have you been saved?

Funny-that's how I'd describe Austrian economic theory.

Honey, you're not smart enough to come up with such a coherent arrangement of words.

Dan8267 says

tatupu70 says

Dan8267 says

Doesn't matter. Keynesianism is a religion. Any facts that disprove its

tenets are somehow wrong, biased, or flawed. It does not matter the argument.

Keynesianism is unquestionable and everything else is heresy. John Maynard

Keynes died for your sins. Have you been saved?

Funny-that's how I'd describe Austrian economic theory.

Honey, you're not smart enough to come up with such a coherent arrangement of words.

lol--you're argumentative skills are deteriorating Dan. Sarcastic posts with no factual content followed by insults is more akin to Abe or Homeboy. You're slipping....

Say's Law is malarky. Businesses hoard money all the time (Corporations Flush with Cash, like Apple under Jobs, just sitting on it for years) - and often, product as well (DeBeers, Disney's careful release of films on DVD/VHS, then forcing stores to send back all unsold copies, to maximize money)