"Get rid of the Keynesian economic model"

Discussion in 'Politics, Religion, Social Issues' started by thermodynamic, Sep 29, 2016.

  1. thermodynamic Suspended

    thermodynamic

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    #1
    People love to say the Keynesian model is the problem of today (where people have to spend to keep the economy going, and wages have gone down but with product costs and top profits going up but nothing trickling back down to the workers/wealth creators.)

    But those who say "get rid of it" seem to be contented with one-liner posts saying to get rid of it, not bothering to say what it should be replaced with - much less any detail therein.

    So what should it be replaced with? Communism a la China? Socialism a la Norway?

    And will a reset button between paradigms be put in or not?
     
  2. NT1440 macrumors G4

    NT1440

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    #2
    Whoa whoa whoa back up here. We haven't been using Keynesian economics in the USA since Reagan. As in, none of the budgeting offices use it. Politically we haven't been using the principles other than in lip service (the "stimulus" as concept was sound, but when it becomes a tax cut to the wealthy that doesn't match up with term) for decades either.

    Let's just get back to actually using classical economic theory instead of this supply-side ******** we've been doing under every president for the last 40 years.
     
  3. thermodynamic thread starter Suspended

    thermodynamic

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    #3
    I absolutely agree - how people who say "Get rid of it" on social media don't seem to realize that paradigm isn't in place or else we wouldn't need corporate welfare and other supply-side bailouts. Not that corporate welfare didn't exist before 1981, obviously, but it's a lot worse since - even by 2006, as numerous media (MSM and otherwise) revealed, taxpayers spend far more on corporate welfare than they do on food stamp-style welfare.

    Trump definitely said he supports trickle down, which only works if enough jobs exist to pay for taxes the way he wants to do things... and if anything trickles down. The last 35 years have shown, from numerous sources both MSM and fringe, a confirmed correlation that trickle down has indeed failed as a concept. Even Reagan would be embarrassed over the state of affairs today and he touted it, much to the chagrin of those who called it "voodoo economics" back then.
     
  4. NT1440 macrumors G4

    NT1440

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    #4
    This is where I disagree, given the theory was first developed by "The Chicago Boys" at the University of Chicago, I'd say it worked exactly as designed.

    It's important to note that this was not how it was sold to the public at all, but I still think the end result of empowering corporations and the uber wealthy beyond the control of nation states was the point all along.
     
  5. DearthnVader macrumors regular

    DearthnVader

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    #5
    Keynes, Hayek, von Mises, book salesmen.

    The Kings of the World do not write books, those that come after them do.
     
  6. yaxomoxay, Sep 29, 2016
    Last edited: Sep 29, 2016

    yaxomoxay macrumors 68000

    yaxomoxay

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    #6
    Most political and financial statements nowadays are one liners and/or cookie-cutter phrases. There is little depth, no originality, and zero thought provoking initiative. Once you start discussing about issues, people go in defensive mode and any possibility to learn anything is erased.
    People also love labels. "I am keynesian" or "I am libertarian" or whatever. It seems that people can't distinguish a thought (or idea) from its possibility of application.
    For example, I subscribe to Milton Friedman's views. But I recognize their theoretical meaning, not their practical implementation which can be implemented up to a point because ideology always clashes with reality or history. In an ideal world Friedman would reduce government to a mere supervisory role. It's a neat idea, I actually love it. But reality is different, and I understand that what he says is currently impossible. However, I utilize his ideas for asking questions about the limits of government in economy.
    So be wary when someone says "let's replace keynesian", "let's use keynesian", "let's use socialism", "free market" etc. because the world does not work by absolutes, and the economy even less. Use those tools, those ideas and thoughts, to ask more questions and for inspiration.
     
  7. Raid macrumors 68020

    Raid

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    #7
    Keynes and Friedman were both scholars and trying to describe the economic events around them. Throughout the years this has evolved economic models, and brought new theories to light. Economics is a science in this aspect because there are mathematical models used to describe the behaviour, and real ways to test them. We may quibble back and forth over what best describes what is going on but at the end of the day we are all trying to better understand what is happening and what should be done to 'steady the boat' as it were.

    The problems in the OP like dependence on consumer consumption to boost the economy, real (as in inflation adjusted) wage decreases, product costs increases (again 'real'), 'fair' distribution of wealth and the effectiveness of trickle down economics are real issues that concerns the economy. However it's one-sided policy (and not economic models) that seems to be the detriment. The global economy is an enormous tangled and interconnected creature that makes it quite difficult on how, when, and where to ease the economy to a stable point. ... and if your boat is leaning to port you just keep telling people to move starboard, you're remedying the situation, but not the problem!
     
  8. DearthnVader macrumors regular

    DearthnVader

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    #8
    Modern economic theory, what a bunch of hooey.

    The problem is Banks create the money, not Governments. Then to compound this problem. Governments then borrow this money, at interest from the banks.

    There is no need for a national debt, and there is no right by which anyone, other than Government, should be creating a nations money.
     
  9. Raid macrumors 68020

    Raid

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    #9
    ...:confused: My days teaching econ 101 are done here, but check this out. You might be confusing "banks" with "central banks". But I agree with you on your last point, about Government being in charge of the monetary policy... luckily they are (without going to much into conspiracy theories about private banks).
     
  10. appleisking macrumors 6502a

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    #10
    Banks don't create money. The Fed does which is not a private bank. Governments borrow money through debt instruments aka anyone willing to pay them. If anything banks borrow money from the government
     
  11. yaxomoxay macrumors 68000

    yaxomoxay

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    #11
    Are you saying that you would print money to pay for everything? Inflation would skyrocket.
     
  12. aaronvan Suspended

    aaronvan

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    #12
    Arguing over competing economic theories is like arguing Star Wars -vs- Star Trek.
     
  13. DearthnVader macrumors regular

    DearthnVader

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    #13
    The Fed is a bank, while not strictly a private bank, it isn't owned by the Government.

    Do you think the Fed is the only bank that can create money?

    When the Fed created it's $4.426 trillion worth of "Reserve Bank Credit"( see money ) How did the Government get that money?

    Do you think $4.426 trillion is all the money there is?

    How much (U.S.)money is there?

    Where do you think the rest of it comes from?
     
  14. yaxomoxay macrumors 68000

    yaxomoxay

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    #14
    who owns it?
     
  15. NT1440 macrumors G4

    NT1440

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    #15
    Supply Side has never met the proclaimed goals (however legitimate those proclamations actually were) anywhere on the planet. Ever.
     
  16. aaronvan Suspended

    aaronvan

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    #16
    OK, but something of a non sequitur...
     
  17. yaxomoxay macrumors 68000

    yaxomoxay

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    #17
    Star Trek, by far.
     
  18. DearthnVader macrumors regular

    DearthnVader

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    #18
  19. yaxomoxay macrumors 68000

    yaxomoxay

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    #19
  20. appleisking macrumors 6502a

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    #20
    Nobody outside of the Fed is legally allowed to create money it's really as simple as that I don't understand what your issue is?
     
  21. DearthnVader macrumors regular

    DearthnVader

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    #21
    http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf
    --- Post Merged, Sep 29, 2016 ---
    It think you confuse money with cash, answer the questions.
     
  22. yaxomoxay macrumors 68000

    yaxomoxay

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    #22
    No he's not.
    From your own article:

    "Monetary policy acts as the ultimate limit on money creation. The Bank of England aims to make sure the amount of money creation in the economy is consistent with low and stable inflation."
     
  23. Raid macrumors 68020

    Raid

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    #23
    From your quote:
     
  24. DearthnVader macrumors regular

    DearthnVader

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    #24
    When did I say annoying about "monetary policy" or "low and stable inflation". I said banks, not Government, are creating money, and that's the problem.
     
  25. Raid macrumors 68020

    Raid

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    #25
    [​IMG]
    https://en.wikipedia.org/wiki/Bank_of_England
     

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