Quote:

---

Originally posted by m52nickerson:

Quote:

---

Originally posted by Geezer:
The last time the national debt went down was 1957. I think there were periods since then when the economy was doing well. So apparently the debt doesn't get paid down.

---

That is because the government does not reduce spending during those times. That was explained to you before as well.

---

Quote:

---

Quote:

---

Originally posted by Geezer:So you're saying that the government should have raised taxes at a time when government spending was going down, just so people would not have enough money to pay off their loans?

Maybe you and SignyM should discuss whether the flow of money is a good or bad thing.

---

Yes that is what I'm saying. During good economic times the government should reduce spending and raise taxes which take money out of the economy, or slows the flow of money. That will slow economic growth which helps prevent massive bubbles, sharply falling interest rates and other such things that can lead to recessions.

---

Quote:

---

Keynesian economics is about using government spending as a counter weight to the economy. Government spending should go up when the economy enters a recession and it should go down when the economy is in a boom. Taxes should be lowered in a recession and rise in an boom.

This is not hard.

Yes money flowing is a good thing. To much flow can be bad as can to little.

---

Quote:

---

Originally posted by kpo:

Quote:

---

You're forgetting GDP again. Debt was steady as a proportion of GDP.


Nope.

---

I'm sorry my friend, but that is indisputable fact. Do I have to show the debt/GDP graph again?

---

Quote:

---

Quote:

---

As noted, the only success story you can show for Keynes is WWII.

---

I sometimes forget how insulated American conservatives are from reality. Here's the CBO's verdict on Obama's ARRA stimulus:

"CBO estimates that ARRA’s policies had the following effects in the second quarter of calendar year 2011 compared with what would have occurred otherwise:

* They raised real (inflation-adjusted) gross domestic product by between 0.8 percent and 2.5 percent,
* Lowered the unemployment rate by between 0.5 percentage points and 1.6 percentage points,
* Increased the number of people employed by between 1.0 million and 2.9 million, and
* Increased the number of full-time-equivalent (FTE) jobs by 1.4 million to 4.0 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers)."

http://www.cbo.gov/publication/42216

---

Quote:

---

Originally posted by kpo:
Very good article:

http://www.businessinsider.com/conservatives-have-no-idea-what-to-do-a
bout-recessions-2013-12#ixzz2ngv5fJ4P

Quote:

---

To be clear, conservatives absolutely do have an economic policy agenda. They favor lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery. They favor these policies now, they favored them in 2008, and they favored them in 2004.

That is, conservatives favor the same set of economic policies when the economy is weak and when it is strong; when unemployment is high and when it is low; when few homeowners are facing foreclosure and when many are. The implication is that conservatives believe there is nothing in particular the government should do about economic cycles.

---

Well conservatives, is it true?

---

Quote:

---

Keynesian spending might have started to reverse the Great Depression, after four to seven years, depending on if you consider Hoover's approach Keynesian (I do), but that reversal wasn't sustainable, because FDR couldn't sell the country on continued spending. Then again, Hayak and Rothbard believe that FDR's interventionist policy actually lengthened the depression by keeping the market from making necessary corrections.

---

Quote:

---

Yet they don't elect representatives who will increase taxes on the wealthy - or much of anybody - to the extent needed to support the spending you think Keynesian recovery requires.

---

Quote:

---

But it's not all rich folks doing the speculation. Unions, pension funds, aggregations of individuals, etc.

---

Quote:

---

Then you have an issue of pretty much forcing folks to pay higher prices for domestic goods, but for several years don't have the domestic goods on the shelves yet. So how does money get spent to stay in circulation?

---

Quote:

---

But Africa's resources can be obtained more cheaply than the same things here in the U.S. The kleptocracies there, often in cahoots with the Chinese, don't care about renewable resources, or environmental or worker safety. If the Chinese can get the raw materials cheaply from Africa and manufacture cheaply in China, they can undercut the U.S. on the world market - especially if we're dealing with governments of countries already stung by our tariffs.

---

Quote:

---

Take your mind off Mises or Keynes... signy

Guten tag, Herr Marx. - Geezer

---

Quote:

---

But the problem isn't the stuff, it's having the folks who are willing to take on the jobs we now send overseas - heavy manufacturing, component assembly, piecework sewing, and many more - have those jobs done in an environmentally responsible, labor-friendly manner, and still keep prices reasonably low.

---

Quote:

---

Could you specify against what foreign industries you would apply your selective tariffs? Autos? Clothes? Electronics? Rum?

---

Quote:

---

Actually it was debt/GNP, and, as noted, it went from 18% in 1929 to 45% in 1939.

---

Quote:

---

This can all be seen from this graph, which shows that US debt was flat for most of the Great Depression

---

Quote:

---

Yeah. CBO. Saying that their plan worked. Got an independent analysis by an unbiased source?

---

Quote:

---

Yep. IMF saying their plan worked. Any unbiased sources?

---

Quote:

---

Originally posted by Geezer:
And it's the flaw in your reasoning. Once governments get the spending habit, it's darn near impossible to break. The last time spending went down (other than immediately after a war) was in the late 1920s.

---

Quote:

---

Originally posted by Geezer:Once again, perhaps you and SignyM should discuss this.

---

Quote:

---

Originally posted by Magonsdaughter:
I'm not.

No answer on what to do about recessions, just lots of attack on Keynesian economics.

---

Quote:

---

Originally posted by SIGNYM:
"The country" was sold, it was Congress that wasn't. AFA "necessary corrections"... enlighten us: What WERE those corrections that were supposed to happen?
...
Our government has consistently represented the will of the wealthy few over the non-wealthy many. Consider it a flaw in the practice of democracy, that politics is so often dominated by money.

---

So the people aren't smart enough to elect representatives who will look out after their interests. No doubt that's why we need you to tell us what to do.

Quote:

---

Unions and pension funds don't generally invest in hedge funds and speculation because they're too risky.

---

Quote:

---

The primary investors are wealthy individuals and institutions.

---

http://useconomy.about.com/od/themarkets/f/Hedge_Investors.htm

Quote:

---

And the point is that there is a lot of money NOT being "invested", and therefore not being recycled into production and consumption. You failed to address that point, which is a major one.

---

But hedge funds invest into production, as below:

Quote:

---

Coatue Management, a hedge fund run by brothers Phillipe and Thomas Laffont, has invested $50 million in a Series C equity financing in Snapchat, the white-hot photo-messaging company run by 23 year-old Evan Spiegel and his cofounder, 25 year-old Bobby Murphy. Thomas Laffont, who runs private company investments for the firm, declined to comment on Snapchat’s valuation in the round, but recently released incorporation documents suggest up to $2 billion.

---

http://www.forbes.com/sites/jjcolao/2013/12/11/hedge-fund-invests-50-m
illion-into-snapchat/

Quote:

---

Quote:

---

Then you have an issue of pretty much forcing folks to pay higher prices for domestic goods, but for several years don't have the domestic goods on the shelves yet. So how does money get spent to stay in circulation?

---

How does it not? Your question makes no sense, please rephrase.

---

The minimum wage, and wages in general, have gone up. I have more money in my pocket. I want to buy a new laptop (or clothes, or a TV, or pretty much anything not currently manufactured in the U.S.). Due to tariffs, the price of any of this stuff has gone up, and no one in the U.S. has ramped up production to make it yet. Even when they do, their costs are going to be a lot higher than manufacturing overseas (due to much higher minimum wage, costs of environmental and safety regulation, etc.), so my increased income won't be able to buy any more than before. Possibly less.

Quote:

---

So what? Why do we need to "compete" in the world market on every single commodity and product, if all we wind up doing is wrecking our environment and our economy?

---

So you're calling for economic isolationism?

Quote:

---

Guten tag, Herr Marx. - Geezer

---

Hmmm... Take your mind off Mises or Keynes or Marx or Hayek or Bernanke. Think about economies and how they work without resorting to (inaccurate) name-calling, if you can. Address the point, if at all possible.

---

When your criticism of capitalism is pretty much word for word Marx, it's hard not to draw a comparison.

Quote:

---

It costs $50 or less to manufacture an iPhone, which sells for $500. I think we can manage to raise wages and still keep prices reasonably low. The only part of this equation which will take a hit is that companies will not take MAXIMUM profit. Again- so what?

---

It costs $50(or up to $200 depending on who you ask and what you consider is involved in "make") to make an iPhone because the folks doing a lot of the work are paid less than $2.00 an hour with no benefits, the factories don't have to meet any environmental or worker safety standards, and the energy is provided by cheap but dirty coal-fired plants. That's sure not gonna fly here.

Quote:

---

Quote:

---

Could you specify against what foreign industries you would apply your selective tariffs? Autos? Clothes? Electronics? Rum?

---

This would require a committee to study our major imports, and which ones we can most quickly convert to USA manufacture. Off the top of my head, since assembly is probably easier to start up than manufacture, one option would be to start at the end of a product and work our way backwards towards raw materials. Another option would be to start with sectors that are the most strategic- electronics, solar cells, and power transmission (which is very loss-y) for example. Like I said, this would require a lot more information and study than I have time for, but a graduated re-industrialization is very do-able.

But whatever else is chosen, energy production and savings has to be consistently part of the process, beginning with the very first sector or product and continuing for the foreseeable future. Because it will take 10-15 years until we have the beginnings of sustainable, robust, independent energy sources. And there is no end of ideas on how to save energy, beginning with the most obvious: If we implement vehicle fuel economy standards NOW, and also reduce our constant military patrols around the world (which, BTW, use up an enormous amount of fuel: the US military is our nations' largest SINGLE consumer of oil) we will immediately save millions of barrels of oil per year. And there are no end of plans that very thoughtful people have devised on how to quickly start conserving energy and switching over to renewable fuels.

---

In other words, you have no idea how you're going to:

1. Sell the U.S. public, business sector, and government on how you're going to completely restructure the economy.
2. Decide which imports are to be subject to tariffs, and when.
3. Manufacture embargoed items in the U.S. with high labor, environmental, safety, and benefits costs without pricing them out of the market, and without shortages while production ramps up.
4. keep retailers that currently rely on imported products for sales in business when you cut off their supply of product.
5. etc.

Quote:

---

I'm going to point out that it's apparent that KPO, M52 and I have plenty of ideas about depressions and how to handle them. But so far, the conservative end of the spectrum seems unable to advance any ideas on what to do, and unable even to advance any rationale for responding (or not responding) to economic crises.

---

I could quote von Meises, Hayek, or Rothbard, but since you've drunk the Keynesian koolade, it probably wouldn't do much good.

What I can say is to repeat one of my first comments. Of the recent recessions, those ended during conservative administrations didn't seem to last any longer than those ended during liberal administrations.


"When your heart breaks, you choose what to fill the cracks with. Love or hate. But hate won't ever heal. Only love can do that."

Quote:

---

Originally posted by kpo:

Quote:

---

Actually it was debt/GNP, and, as noted, it went from 18% in 1929 to 45% in 1939.

---

Ok, let's post the graph again.



Do you or don't you see a flat line from about the middle of 1933 onwards?

---

Quote:

---

What it comes down to is you have no case for there having been wild, unrestrained spending throughout the Great Depression. That didn't come until WWII, and when it did come the economy recovered.

---

Quote:

---

or spending ON SOCIAL AND JOBS PROGRAMS at a rate that you can't sell to the WEALTHY

---

Quote:

---

A 2002 International Monetary Fund study looked at "consensus forecasts" (the forecasts of large groups of economists) that were made in advance of 60 different national recessions in the 1990s: in 97% of the cases the economists did not predict the contraction a year in advance. On those rare occasions when economists did successfully predict recessions, they significantly underestimated their severity.

---

Quote:

---

Originally posted by Magonsdaughter:
I'm not.

No answer on what to do about recessions, just lots of attack on Keynesian economics.

---

Quote:

---

Originally posted by m52nickerson:
It's a flaw in the way government is run, not my reasoning.

---

Quote:

---

Originally posted by SIGNYM:

Quote:

---

or spending ON SOCIAL AND JOBS PROGRAMS at a rate that you can't sell to the WEALTHY

---

Fixed that for you.

---

Quote:

---

Originally posted by Geezer:
But we live with the way the government is run, not your reasoning. If you propose solutions that will never be implemented, they do what good?

---

Quote:

---

Originally posted by Geezer:
Keynesian economics, particularly its response to recession/depression, seems to offer the most harm if it fails, what with high taxes, high spending, massive deficits, unresolved problems of the original recession, and the cries from its proponents that it'll eventually work if we just spend a lot more.

Guess I just don't have the faith to be a Keynesian.

---

Quote:

---

Originally posted by Geezer:

Quote:

---

Originally posted by Magonsdaughter:
I'm not.

No answer on what to do about recessions, just lots of attack on Keynesian economics.

---

I never claimed to have an answer.

Just asking if anyone had examples where recessions during conservative administrations took longer to end than those during liberal administrations.

---

Quote:

---

I understand why you like Keynes. He gives you permission to go out and take from every class and group you hate.

---

Quote:

---

But we live with the way the government is run, not your reasoning. If you propose solutions that will never be implemented, they do what good?

---

Quote:

---

But we live with the way the government is run, not your reasoning. If you propose solutions that will never be implemented, they do what good?

---

Quote:

---

Interesting in that per the graph on the cite below, federal spending, as a percent of GDP, pretty much tripled between 1929(<4%) and 1936(11%).

---

Quote:

---

If you use the controls on this site to look at Gross Public Debt for the 1920-1940 period as a percent of GDP, it goes from about 18% in 1929 to 44% in 1938.

---

Quote:

---

Or you can pick the Federal Deficit as a percent of GDP and see it went from a 1% surplus in 1930 to a 4.5% deficit in 1936.

---

Quote:

---

Not sure how these reconcile with your "flat line".

---

Quote:

---

So we're back to only a war, or spending at a rate that you can't sell to the country, can end a depression.

---

Quote:

---

The non-partisan CBO crafted Obama's stimulus package? The IMF crafted Japanese economic policy? Got any cites to back this up?

---

Quote:

---

Got any answer to the mountain of evidence of governments cutting back on spending during downturns, and hurting growth?

---

Quote:

---

It does not encourage faith in any particular economic school. Guess I'm as agnostic about economic theories as religion, since I can see as little proof for one as the other.

Given that I have little faith in any economic school, if I'm forced to choose, I'd choose the one that offers the least chance of harm if it doesn't work, and reject the one that offers the most harm if it doesn't work. Keynesian economics, particularly its response to recession/depression, seems to offer the most harm if it fails, what with high taxes, high spending, massive deficits, unresolved problems of the original recession, and the cries from its proponents that it'll eventually work if we just spend a lot more.

Guess I just don't have the faith to be a Keynesian.

---

Quote:

---

Originally posted by m52nickerson:
The way government runs can be changed, it is not a static thing. You turning this in to "well the government doesn't do this" is a massive cop out because conservatives and libertarians have no idea how to deal with recessions or how to prevent them.

---

Quote:

---

You just ignore that larger picture and only focus on the parts you don't like. You also ignore the much greater harm recessions and depressions do to everyday people than government deficits ever do.

---

Quote:

---

Originally posted by ElvisChrist:
You provided just such examples yourself, way back on the first page of this thread. You listed four recessions (three under Republican administrations, one under a Republican and Democratic admin), and showed that the recession ended much more quickly once the Democrat took office.

---

Quote:

---

I know you haven't faced that reality yet (you've been ignoring it ever since I pointed it out the first time), but it really is right there in your own data.

---

Quote:

---

I focus on things I question. For example, I have grave doubts about SignyM and KPO's massive infrastructure projects, since they are going to take years to ramp up, what with developing the highly trained workers now needed for such projects and building the equipment needed to build the infrastructure. If you factor in SignyM's tariff idea, it gets even harder, since much constriction machinery is currently imported.

---

Quote:

---

That's what's both interesting and troubling about this subject. You can propose most anything, and back it up with data spun by your particular economic theory, but there's no actual proof as to what caused what.

---

Quote:

---

Originally posted by SIGNYM:

Quote:

---

I understand why you like Keynes. He gives you permission to go out and take from every class and group you hate.

---

GEEZER, is it possible, do you suppose, to address the point of the discussion without resorting to emotional personal attacks?

---

Quote:

---

Here's a start: Please explain IN YOUR OWN WORDS how economies function, and HOW libertarianism is supposed to make them work better. USE REAL DATA. Don't quote Mises and Hayek, who are fantasists who simply repeat the same mantra over and over again. Refer to the real world.

---

Quote:

---

As far as classes that I "hate": How do you know WHAT "class" I belong to??? Oh, that's right- you don't, do you?

---

Quote:

---

Here's a start: Please explain IN YOUR OWN WORDS how economies function, and HOW libertarianism is supposed to make them work better. USE REAL DATA. Don't quote Mises and Hayek, who are fantasists who simply repeat the same mantra over and over again . Refer to the real world.-signy

Sure. I'm to explain economics, but I can't use any theories you disagree with.-geezer

---

Quote:

---

GEEZER, is it possible, do you suppose, to address the point of the discussion without resorting to emotional personal attacks? -signy

---

Quote:

---

Originally posted by kpo:

Quote:

---

Interesting in that per the graph on the cite below, federal spending, as a percent of GDP, pretty much tripled between 1929(<4%) and 1936(11%).

---

This ignores sizeable revenues increases in the corresponding period.

---

Quote:

---

Quote:

---

Or you can pick the Federal Deficit as a percent of GDP and see it went from a 1% surplus in 1930 to a 4.5% deficit in 1936.

---

I'm not sure what this is supposed to show. We've already established that FDR ran deficits. The debt grew, but not faster than the economy grew. That's why debt/GDP stayed level.

---

Quote:

---

And I don't know why you picked those two specific years, but they are quite illustrative. In 1930 the US ran a budget SURPLUS, the economy SHRANK, and the debt burden GREW. In 1936 the US ran a sizeable budget deficit, the economy GREW and the debt burden SHRANK. Everywhere we turn in this debate, we find more evidence proving Keynes right!

---

Quote:

---

This whole, 'you can never sell Keynesian spending on the size that's needed, so you may as well not do any of it at all' argument, I just find truly bizarre. "We can't spend enough to end the depression overnight, so we shouldn't bother with a smaller stimulus package that will only shorten the depression, and make its effects less severe..." Idiotic fatalism.

---

Quote:

---

What you still haven't answered:

---

Quote:

---

Originally posted by Geezer:
Increasing deficits since 1957 seems to indicate that while governments can be changed, we haven't seen such a change so far, and have no idea how to accomplish it. If you have such an idea, that has a chance to work, please elucidate.

---

Quote:

---

Originally posted by Geezer:
I focus on things I question. For example, I have grave doubts about SignyM and KPO's massive infrastructure projects, since they are going to take years to ramp up, what with developing the highly trained workers now needed for such projects and building the equipment needed to build the infrastructure. If you factor in SignyM's tariff idea, it gets even harder, since much constriction machinery is currently imported.

---

Quote:

---

Originally posted by Geezer:
And if debt/GDP stayed level, why'd the deficit go up?

---

Quote:

---

Originally posted by Geezer:
Once again, this is based on your belief that Keynes is the only solution.

As noted early in this thread, recessions appear to end in similar periods of time regardless of who is in office, or what actions they take.

---

Quote:

---

Originally posted by SIGNYM:
to explain YOUR understanding using your own words. It not only tests YOUR understanding of those theories, it also makes clear where YOU might deviate from their formal theories. When addressing your (or their) theories, we can then address our questions or disagreements TO YOU, not Wikipedia.

---

Quote:

---

(and you) Have failed to propose any suggestions or explain your rationale, in your own words. In other words: have not addressed the topic of the thread.

---

Quote:

---

Originally posted by Geezer:
I'm still looking for an answer to whether conservative or liberal response to recession, as proposed in the article KPO cited, has worked better in the recent past.

---

Quote:

---

No. It ignores that completely. It just shows that federal spending increased greatly.

---

Quote:

---

Actually, spending as a percent of GDP increased quite a bit, as shown above.

---

Quote:

---

And if debt/GDP stayed level, why'd the deficit go up?

---

Quote:

---

Or that the economy turned around DESPITE what Roosevelt was doing, and would have recovered sooner with less intervention. So I could say that your data proves Hayek or Rothbard was right.

---

Quote:

---

Who knows?

---

Quote:

---

Yep.

Lots of stuff you and SignyM have ignored as well. You really want to go there?

---

Quote:

---

I'm still looking for an answer to whether conservative or liberal response to recession, as proposed in the article KPO cited, has worked better in the recent past.

---

Quote:

---

I'm still looking for an answer to whether conservative or liberal response to recession, as proposed in the article KPO cited, has worked better in the recent past.

---

Quote:

---

Yeah, this tells me that you're not even looking at the data. How exactly could the data I provided back up Hayek or Rothbard?

---

Quote:

---

Depends on what you assume is the hole. Lots of people out of work and some starving - in the Great Depression people were literally eating grass b/c they were starving - seems like a big hole that needs to be fixed.

---

Quote:

---

Originally posted by ElvisChrist:


Geezer, if you don't have any information that persuades you one way or the other, why is it that you specifically point out Keynesian economics as not being something you can believe in?

You don't seem to have any problem believing in Hayek or others, despite your own assertion that nobody knows and that all economic beliefs are akin to acts of faith.

So what is your underlying bias that prevents you from accepting that, in your own estimation, Keynes is every bit as valid as any other economic school of thought?

---

Quote:

---

Originally posted by kpo:

Quote:

---

I'm still looking for an answer to whether conservative or liberal response to recession, as proposed in the article KPO cited, has worked better in the recent past.

---

I would define conservative response as spending cuts, and liberal response as deficit spending. Is that ok? From there answering the question is easy.

It's not personal. It's just war.

---

Quote:

---

Originally posted by kpo:
How exactly could the data I provided back up Hayek or Rothbard?

---

Quote:

---

Conclusion: The Lessons of Mr. Hoover's Record

Mr. Hoover met the challenge of the Great Depression by acting quickly and decisively, indeed almost continuously throughout his term of office, putting into effect "the greatest program of offense and defense" against depression ever attempted in America. Bravely he used every modern economic "tool," every device of progressive and "enlightened" economics, every facet of government planning, to combat the depression. For the first time, laissez-faire was boldly thrown overboard and every governmental weapon thrown into the breach. America had awakened, and was now ready to use the State to the hilt, unhampered by the supposed shibboleths of laissez-faire. President Hoover was a bold and audacious leader in this awakening. By every "progressive" tenet of our day, he should have ended his term a conquering hero; instead he left America in utter and complete ruin—a ruin unprecedented in length and intensity.

What was the trouble? Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. In contrast to the myth of laissez-faire, we have shown in this book how government intervention generated the unsound boom of the 1920s, and how Hoover's new departure aggravated the Great Depression by massive measures of interference. The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free-market economy, and placed where it properly belongs: at the doors of politicians, bureaucrats, and the mass of "enlightened" economists. And in any other depression, past or future, the story will be the same.

---

Quote:

---

Use the definitions stated in the article you posted

---

Quote:

---

Be aware that if you claim that conservatives used stimulus, that pretty much invalidates the claim of the article you cited, and the title of this thread.

---

Quote:

---

Here's Rothbard's take.

http://mises.org/rothbard/AGD/contents.asp

---