Hope & Change With New Congress

[extanker]

maybe not rewritten but updated.....i know it was written by a bunch of guys in a tavern so i understand that. or they had a sense of humor and wanted to break chops. didnt they think there would be a problem with "we the people". i think some words need to be defined more clearly.....i meant to say "the right of the people.....my bad wrong doc

[Lordblood]

Honestly, I'm expecting more of the same. While the Democrats "controlled" the Senate and the House before, they didn't have 60 candidates so the Republicans filibustered EVERYTHING the Democrats wanted to do. Nothing really got done, health care was filled with nonsense and compromise to get a couple of Republican votes, finance reform was rubbish. The tax cut debate was just a smearing campaign. Now everything the Republicans get passed through the house and senate will just get vetoed by Obama, unless he compromises as he promised.

I'm not opposed to seeing any one ideology be tested, because I don't think even the best economists can tell you truly if Keynsian economics will work any better than Smithian economics, or vice versa. We all believe one is better than the other, but belief is not proof, it is assumption.

Personally, I think Keynes is the way to go. While we can sit back and let the Economy fix itself, I'd much rather have everyone pitch in and contribute money towards infrastructure and education to not only try and fix the economy, but invest in the future as well. Of course where and how much we spend is up to debate, but I believe that at least the notion of trying is right.

[Brucelee]

Originally Posted by Lordblood

Honestly, I'm expecting more of the same. While the Democrats "controlled" the Senate and the House before, they didn't have 60 candidates so the Republicans filibustered EVERYTHING the Democrats wanted to do. Nothing really got done, health care was filled with nonsense and compromise to get a couple of Republican votes, finance reform was rubbish. The tax cut debate was just a smearing campaign. Now everything the Republicans get passed through the house and senate will just get vetoed by Obama, unless he compromises as he promised.

I'm not opposed to seeing any one ideology be tested, because I don't think even the best economists can tell you truly if Keynsian economics will work any better than Smithian economics, or vice versa. We all believe one is better than the other, but belief is not proof, it is assumption.

Personally, I think Keynes is the way to go. While we can sit back and let the Economy fix itself, I'd much rather have everyone pitch in and contribute money towards infrastructure and education to not only try and fix the economy, but invest in the future as well. Of course where and how much we spend is up to debate, but I believe that at least the notion of trying is right.

"managing the economy is a myth. It is, what it is.

[Lordblood]

Originally Posted by Brucelee

"managing the economy is a myth. It is, what it is.

You say it as if that is it. Sorry Brucelee, but Keynes didn't base his economics on BS or a conservative agenda. There is real research behind it, and to dismiss it is honestly an insult to economics as a field.

[Brucelee]

Originally Posted by Lordblood

You say it as if that is it. Sorry Brucelee, but Keynes didn't base his economics on BS or a conservative agenda. There is real research behind it, and to dismiss it is honestly an insult to economics as a field.

Given that I teach Economics and Finance, that would be a mistake on my part, no?

Actually, Keynes initial work has some merit as far as it went. Subsequent observations and of course, the misuse of his THEORIES, have called most of his assumptions and conclusions into dispute among reputable economists.

I think the US' recent experience with Stimulus and such will put the final nail in the coffin except for of course, the true believers.

The question isn't really whether the government can contribute to aggregate demand in the short run (it can given the method). Rather, the issue is whether this is the best way (among alternatives) for the government to act.

That I think, is very much in question.

My last comment is to the "economics as a field." In truth, economics is not a science as traditionally defined. It is much more a bunch of theories about aggregate human behavior with money as a signal.

One can prove almost nothing in economics. That is why it is so much fun to teach.

[Lordblood]

Originally Posted by Brucelee

Given that I teach Economics and Finance, that would be a mistake on my part, no?

Actually, Keynes initial work has some merit as far as it went. Subsequent observations and of course, the misuse of his THEORIES, have called most of his assumptions and conclusions into dispute among reputable economists.

I think the US' recent experience with Stimulus and such will put the final nail in the coffin except for of course, the true believers.

The question isn't really whether the government can contribute to aggregate demand in the short run (it can given the method). Rather, the issue is whether this is the best way (among alternatives) for the government to act.

That I think, is very much in question.

My last comment is to the "economics as a field." In truth, economics is not a science as traditionally defined. It is much more a bunch of theories about aggregate human behavior with money as a signal.

One can prove almost nothing in economics. That is why it is so much fun to teach.

We're on the same page now. I wholeheartedly agree that the spending over the recession has been wasteful. I suppose what we have to figure out is, which would be the better spend of money: tax cuts or government spending. I think at the moment it would have to be government spending, as tax cuts are not going to directly encourage anyone to spend.

I would like to know where you think Keynes' original theories stop and bad assumptions begin, and perhaps this is more of an opinion than a fact but either way I'm curious.

[Brucelee]

I favor tax cuts simply because the impact of pumping money into the consumer's pocket is faster and cheaper than having government try to spend money. Moreover, the speed of rescinding a tax cut is faster than trying to get the Feds to stop spending money.

That said, I would suggest what we need now is a bit of stability and patience. For one, I would repeal the HC law and start over.

But, that is just me.

[insite]

Originally Posted by Lordblood

I think at the moment it would have to be government spending, as tax cuts are not going to directly encourage anyone to spend.

encouraging people to spend when they're leveraged to the hilt & their personal asset bubble (HOUSE) just popped is ludicrous. the thing i don't understand is this:

why do people assume that if money is SAVED, it is not working in the economy?

if people aren't spending, they are either:

a) placing it into some type of savings account, whereby it can then be loaned out to others. this has a multiplier effect.

b) investing it, whereby it can provide needed capital for future production

c) de-leveraging

the real problem is that right now, most people fall into category C. they are paying down debt rather than saving. encouraging spending when, in aggregate, the populace is leveraged to the hilt, is not only irresponsible, it won't work! we pulled forward too much future demand with borrowed money. that leaves a consumption gap. at some point, we will have to pay the piper. the longer we wait, the worse it will get......