Who believes Keynesians would EVER carry out austerity/cutbacks in good times?

[glenn1]

Keynesians both on this board and IRL always say they'll cut back spending once good times come back, do you believe them?

 

[Blackjack200]

Keynesians both on this board and IRL always say they'll cut back spending once good times come back, do you believe them?

A lot of it happens automatically. Unemployment and welfare payouts go down as more people go back to work. Less food stamps, less Medicaid. More people pay taxes producing more revenue. Also the GDP increases, reducing the national debt/GDP ratio.

Edit: You just can't stand all the good news on the economy lately, can you? I love it!

 

[sandorski]

Keynesians both on this board and IRL always say they'll cut back spending once good times come back, do you believe them?

Better question: Would the Keynesian Idea around this be a good idea?

If it is, then whether "Keynesian's" or not did it is moot. It is then something everyone should strive to do.

 

[Genx87]

Not outright cuts. Their cuts are via inflation.

 

[fskimospy]

Not outright cuts. Their cuts are via inflation.

Presumably by austerity we mean reducing our debt/GDP ratio, correct? That's how economists look at it anyway. By an economics measure not only do I think Keynesians will do it, but the historical record clearly shows we HAVE done it in the past. Repeatedly.

This seems to be the refuge for people who were advocating for austerity during the downturn. At first they argued that it was the right path and would solve the problem better. That turned out to be pretty obviously wrong from the economic data. Instead of admitting that their thinking was flawed though they then shifted to another tactic, which was to say that even if the Keynesians were right, they would never follow through on future debt reduction so therefore it didn't matter anyway.

The goal here is to find a way to not change economic thinking in the face of evidence.

 

[halik]

See Clinton/surplus

 

[BoberFett]

A lot of it happens automatically. Unemployment and welfare payouts go down as more people go back to work. Less food stamps, less Medicaid. More people pay taxes producing more revenue. Also the GDP increases, reducing the national debt/GDP ratio.

Edit: You just can't stand all the good news on the economy lately, can you? I love it!

As Democrats constantly point out, unemployment and welfare are barely visible portions of our budget. You can't now claim that we'll spend that much less when you claim we're barely spending anything on it right now.

 

[Double Trouble]

I'm not willing to completely ignore history and pretend that anyone would actually reduce spending in prosperous time. Debt as a percentage of gdp occasionally goes down, but that's not because of a reduction in spending, it's the result of gdp going up. Spending simply never actually gets reduced, no matter what the economy is doing. Plenty of excuses and justification will always be available as to why.

Spending will always increase, as will government control over citizens. That's just the natural order of things, with an occasional reset when things get out of hand to the point of inciting revolution.

 

[fskimospy]

As Democrats constantly point out, unemployment and welfare are barely visible portions of our budget. You can't now claim that we'll spend that much less when you claim we're barely spending anything on it right now.

Medicaid is a very visible portion of our budget and is directly tied to people in economic distress.

According to the CBO spending on automatic stabilizers is to be responsible for about 75% of the deficit in the most recent year.

http://www.cbo.gov/sites/default/files/43977_AutomaticStablilizers3-2013.pdf

 

[fskimospy]

I'm not willing to completely ignore history and pretend that anyone would actually reduce spending in prosperous time. Debt as a percentage of gdp occasionally goes down, but that's not because of a reduction in spending, it's the result of gdp going up. Spending simply never actually gets reduced, no matter what the economy is doing. Plenty of excuses and justification will always be available as to why.

Who cares how it happens so long as debt/GDP goes down?

Seriously, why would it matter how it happened?

 

[Atreus21]

See Clinton/surplus

Clinton didn't run a surplus.

 

[Matt1970]

Clinton didn't run a surplus.

Right, they weren't true surpluses as our debt continued to climb, but that proves the point that when more money goes into government, more spending comes out.

 

[Matt1970]

Who cares how it happens so long as debt/GDP goes down?

Seriously, why would it matter how it happened?

Because you are not "implementing" austerity. You aren't implementing anything. You are just letting revenue overtake the spending levels you decided were necessary during bad times. I would think even Mr. Objective views would know that isn't austerity by definition.

 

[Moonbeam]

The progress of the human race has been held back for centuries now by the slow acceptance of, and active resistance to, facts that conflict with all manner of ideologies which CBDives have been inculcated with for the purposes of creating an ego identification that produces hubris and pride. They deny and prevent so they don't have to experience painful cognitive dissonance. They would actually prefer that the human race die than that they personally have to awaken to the game they play. The pain we have suffered is enormous and deeply repressed. All us pitiful psychotics had to become so to survive. It couldn't have been otherwise. To separate ourselves from God or our true human nature was our only sin. A lie was pulled over our eyes. Christmas is one manifestation of the fact it can be reversed. I hope you all have a good one.

 

[Matt1970]

The progress of the human race has been held back for centuries now by the slow acceptance of, and active resistance to, facts that conflict with all manner of ideologies which CBDives have been inculcated with for the purposes of creating an ego identification that produces hubris and pride. They deny and prevent so they don't have to experience painful cognitive dissonance. They would actually prefer that the human race die than that they personally have to awaken to the game they play. The pain we have suffered is enormous and deeply repressed. All us pitiful psychotics had to become so to survive. It couldn't have been otherwise. To separate ourselves from God or our true human nature was our only sin. A lie was pulled over our eyes. Christmas is one manifestation of the fact it can be reversed. I hope you all have a good one.

It's responses from a random number generator.

 

[fskimospy]

Because you are not "implementing" austerity. You aren't implementing anything. You are just letting revenue overtake the spending levels you decided were necessary during bad times. I would think even Mr. Objective views would know that isn't austerity by definition.

I was referring to his post and asking him why he was concerned about certain things, not if I thought what he was saying was good or even if it constituted austerity, Mr. Poor Reading Comprehension.

He was objecting to a lack of spending cuts, but if the deficit/debt is your only concern why do you care about how it gets closed?

I'll tell you why, it's because conservatives aren't actually concerned with the debt or deficits. They are concerned with reducing government spending/taxes. The deficit and debt are convenient vehicles for this sometime, but conservatives will gladly throw them overboard if it means you get what you want.

This is why conservatives have been generally incoherent and flip-floppy on economic issues for a long time now.

 

[werepossum]

I was referring to his post and asking him why he was concerned about certain things, not if I thought what he was saying was good or even if it constituted austerity, Mr. Poor Reading Comprehension.

He was objecting to a lack of spending cuts, but if the deficit/debt is your only concern why do you care about how it gets closed?

I'll tell you why, it's because conservatives aren't actually concerned with the debt or deficits. They are concerned with reducing government spending/taxes. The deficit and debt are convenient vehicles for this sometime, but conservatives will gladly throw them overboard if it means you get what you want.

This is why conservatives have been generally incoherent and flip-floppy on economic issues for a long time now.

Whereas proggies are rock solid: more government spending, more government power, no matter what.

 

[Matt1970]

Whereas proggies are rock solid: more government spending, more government power, no matter what.

LOL, pretty much.

 

[fskimospy]

Whereas proggies are rock solid: more government spending, more government power, no matter what.

Of course not. As usual you can't argue against someone's actual beliefs so you invent a caricature to fight against. I'm not sure why you are so invested in maintaining your ideological bubble.

 

[Matt1970]

Of course not. As usual you can't argue against someone's actual beliefs so you invent a caricature to fight against. I'm not sure why you are so invested in maintaining your ideological bubble.

You guys wrote the book on making up someone's position on an issue to argue against. But lets take a look at this "objectively". Increases in spending were ask for when times were bad with the promise to cut spending when times improve. Now that things improve it's "Well, we don't need to cut back spending because we have the funds"

 

[fskimospy]

You guys wrote the book on making up someone's position on an issue to argue against. But lets take a look at this "objectively". Increases in spending were ask for when times were bad with the promise to cut spending when times improve. Now that things improve it's "Well, we don't need to cut back spending because we have the funds"

Actually nobody has argued the latter, which is ironic considering you spent the first part of your post complaining about people making straw man arguments.

To be clear, an increase in debt/GDP ratio was recommended during the bad times. Spending was probably the best way to do it, but not the only way. Now that good times appear to be coming (fingers crossed!) we should work to reduce the debt/GDP ratio.

That ratio is basically the only relevant metric we should be looking at for the purposes of this discussion.

 

[werepossum]

Actually nobody has argued the latter, which is ironic considering you spent the first part of your post complaining about people making straw man arguments.

To be clear, an increase in debt/GDP ratio was recommended during the bad times. Spending was probably the best way to do it, but not the only way. Now that good times appear to be coming (fingers crossed!) we should work to reduce the debt/GDP ratio.

That ratio is basically the only relevant metric we should be looking at for the purposes of this discussion.

Of course, it's pure coincidence that as GDP improves the proggies can spend even more money and take on even more debt while claiming austerity.

 

[Matt1970]

Actually nobody has argued the latter, which is ironic considering you spent the first part of your post complaining about people making straw man arguments.

To be clear, an increase in debt/GDP ratio was recommended during the bad times. Spending was probably the best way to do it, but not the only way. Now that good times appear to be coming (fingers crossed!) we should work to reduce the debt/GDP ratio.

That ratio is basically the only relevant metric we should be looking at for the purposes of this discussion.

Work to reduce it, or just let things go as is and hope for the best? Remember, you said government spending is not constrained by revenue, it should also not be inflated due to increased revenue.

 

[fskimospy]

Work to reduce it, or just let things go as is and hope for the best? Remember, you said government spending is not constrained by revenue, it should also not be inflated due to increased revenue.

I happen to think we should work to reduce it once things get better, but I would wait until interest rates get back to something considerably above zero. Once that happens you can cut deficits and offset their negatives with lower interest rates.

Yes, government spending is not constrained by revenue. This is a simple fact. Revenues CAN have an effect on inflation, however, which if nothing else serves as a political constraint on expenditures. In that way increased revenues can lead to more spending, but they certainly don't have to.

 

[Attic]

Keynsian theory could work if it were implemented by a moral and just authority. We have some key components lacking here with the current leadership.


Current stand out problem with current Keynesian monetary policy is the explosive wealth inequality resulting from it. Centralizing control past a point increases inequality and corruption. That's the elephant in the room given an otherwise decent recover from the GFC in the USA. Yellen's solution is for the poor to just buy some assets... Yellen on Poverty of Poor

Monetizing the debt may look good on a paper when written by habitual liars and deceivers, but apart from increasing government control and the asset accounts of the 1% we have a decimated middle class now without much leverage for improvement (hey look at the numbers EVERYTHING IS AWESOME!).

The bubble in the stock market and low interest rates courtesy of the 4 Trillion dollar printing marathon by the FED has had allowed for business as usual, I don't see much of a change for the overall status quo that has led to many of the problems the country faced going into, during and after the GFC. Wall Street is getting deregulated again and shifting more and more risk to the tax payer while it keeps all the winnings.