The Italian Mafia: What happens to the economy when you cut public spending.

[momeNt]

If you owe $2,000, and borrow $10,000 to pay it off, you aren't $8,000 positive.

In the short term you absolutely are positive! If Keynes was right as the OP and article suggest, the short term is all that matters. In the long run, we're all dead anyways so how does debt really matter?

 

[fskimospy]

In the short term you absolutely are positive! If Keynes was right as the OP and article suggest, the short term is all that matters. In the long run, we're all dead anyways so how does debt really matter?

Hey look, something else you don't understand about economics. That's not what Keynes meant at all.

 

[momeNt]

Hey look, something else you don't understand about economics. That's not what Keynes meant at all.

Oh no I understand exactly what he means. I just like to poke fun at the fact that his notions of government intervention being the cure-all when it is government policies - specifically monetary policies that cause all these problems in the first place.

I'm assuming that the quote came from the fact that in the early 1920s Great Britain was suffering from gold drains but yet was addicted to cheap credit. Instead of raising interest rates to combat the gold drains they just buddy up with the USA and further expand the monetary base with more inflation in both the USA and GB. His quote is saying that this inflation will not cure itself and needs to be stopped by the central banks. But it was the central banks DOING IT! How can he expect either GB or USA to 180 their views on monetary policy with all the illusions of posterity?

Sometime after this quote and the great depression he completely changes his viewpoint though and adopts inflationary views on how the government should operate, and so, here we are now. Listening to a man (Keynes) who during the inflationary boom of the 1920 was actually advocating putting an end to it, and then once the inflationary boom collapsed, advocates the cure as just more inflation.

Sounds stupid to me, but I guess to others it makes perfect sense?

 

[rchiu]

I'd like to see the 1.4x ~ 2x return on that stimulus loan for Solyndra......

 

[werepossum]

So your plan to fix the economy, is to take money out of the economy then recycle it through the economy? How exactly is that fixing anything? Sounds a lot like what the guys in Wall Street were doing.

It is an amusing conceit. Evidently if the people earn money and spend it, it's bad spending. But if government takes that money, redistributes it to the people, and THEN they spend it, it's now good spending. Who would have thought that the people whose earning power is so low that they have to be subsidized would be the ones who can spend productively?

 

[werepossum]

I'd like to see the 1.4x ~ 2x return on that stimulus loan for Solyndra......

LOL

We loaned half a billion to save a thousand jobs and ended up losing fourteen hundred jobs?

 

[bfdd]

It is an amusing conceit. Evidently if the people earn money and spend it, it's bad spending. But if government takes that money, redistributes it to the people, and THEN they spend it, it's now good spending. Who would have thought that the people whose earning power is so low that they have to be subsidized would be the ones who can spend productively?

To me it seems like another way to get people to skim off the top, exactly the same reason those wall street fucks started all the new and crazy financial money making schemes.