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Debates Forum

  1. Standard member sh76
    Civis Americanus Sum
    26 Oct '11 14:41
    http://www.youtube.com/watch?v=_9DH07MBG_w

    Friedman claims that the famous Keyensian economic doctrine of government spending solely for the sake of putting money into the hands of consumers applied only to times of economic depression (presumably recession as well) but that Keynes would disapprove of the length to which modern government spending in all times has taken his philosophy.

    Is this just a self-serving error or is Friedman correct?
  2. 26 Oct '11 14:53
    Originally posted by sh76
    http://www.youtube.com/watch?v=_9DH07MBG_w

    Friedman claims that the famous Keyensian economic doctrine of government spending solely for the sake of putting money into the hands of consumers applied only to times of economic depression (presumably recession as well) but that Keynes would disapprove of the length to which modern government spending in all times has taken his philosophy.

    Is this just a self-serving error or is Friedman correct?
    A better question is why we stake the entire fate of a nation and world on the theories of a few ivory tower economists?
  3. 26 Oct '11 15:07
    Friedman was probably right, after all Keynesianism implies paying off debt in good times, which many governments have done to only a limited degree, if at all. This in turn has caused current deficits to be much higher than they needed to be, and it also contributed to many bubbles as consumer spending was artificially high as surpluses were turned into tax breaks rather than savings.
  4. 26 Oct '11 15:17
    I think economists like Keynes believe governments should spend relatively more during downturns. But we still have to spend responsibly and we have to actually spend less during other times. It seems government has no desire to make cuts and uses Keynes as a pretext to increase spending when times are tough.

    If you object to the fact that economists (who live in ivory towers influence policy), who would like the government to consult before making economic decisions.
  5. 26 Oct '11 16:23
    Originally posted by whodey
    A better question is why we stake the entire fate of a nation and world on the theories of a few ivory tower economists?
    If you feel you are in a position to offer economic policy proposals which are significantly superior to any of those propounded by "ivory tower economists", you are certainly welcome to put them forward for consideration.

    Why not devote a thread to it? "whodey's economic platform" seems like a suitable title.
  6. 26 Oct '11 17:19
    http://spectator.org/archives/2011/07/22/fatal-flaws-of-keynesian-econo
  7. 26 Oct '11 17:31
    Originally posted by Metal Brain
    http://spectator.org/archives/2011/07/22/fatal-flaws-of-keynesian-econo
    lmao
  8. Donation rwingett
    Ming the Merciless
    26 Oct '11 17:42
    Originally posted by sh76
    http://www.youtube.com/watch?v=_9DH07MBG_w

    Friedman claims that the famous Keyensian economic doctrine of government spending solely for the sake of putting money into the hands of consumers applied only to times of economic depression (presumably recession as well) but that Keynes would disapprove of the length to which modern government spending in all times has taken his philosophy.

    Is this just a self-serving error or is Friedman correct?
    Friedman was never correct about anything.
  9. 26 Oct '11 20:15
    Originally posted by whodey
    A better question is why we stake the entire fate of a nation and world on the theories of a few ivory tower economists?
    Because they've worked in the past - many times. Empirical data points for the benefit of policy.
  10. 26 Oct '11 20:26
    Originally posted by sh76
    http://www.youtube.com/watch?v=_9DH07MBG_w

    Friedman claims that the famous Keyensian economic doctrine of government spending solely for the sake of putting money into the hands of consumers applied only to times of economic depression (presumably recession as well) but that Keynes would disapprove of the length to which modern government spending in all times has taken his philosophy.

    Is this just a self-serving error or is Friedman correct?
    First of all, he never advocated spending SOLELY for that purpose, but he simply pointed out that even if you did spend it for nothing in particular it could help prime the pump on a deflated economy. But obviously he would advocate that the money be spent in such a way as to benefit the public and develop the economy.

    On your question, I think Friedman overstates the argument, but Keynes did advocate "fiscal policy," that is to deficit spend during a recession/contraction, but then pull money out of the economy during the inflationary cycle. To the degree that spending is hardly ever reduced during the inflationary cycle, but that inflation is instead controlled through monetary policy.

    If it was understood that spending should shift with the economic cycles, we'd be much better off, most likely. But unfortunately there's no effective political force to support an intricate policy, and the politics of the day in question tend to override long term pragmatism in anything.
  11. 26 Oct '11 23:31
    Originally posted by rwingett
    Friedman was never correct about anything.
    A stopped clock is right twice a day. Regardless of you ideology, if you actually know anything about economics, you would have a bit more respect for a genius like Milton Friedman.
  12. 26 Oct '11 23:38
    Originally posted by Kunsoo
    First of all, he never advocated spending SOLELY for that purpose, but he simply pointed out that even if you did spend it for nothing in particular it could help prime the pump on a deflated economy. But obviously he would advocate that the money be spent in such a way as to benefit the public and develop the economy.

    On your question, I think Friedman o ...[text shortened]... , and the politics of the day in question tend to override long term pragmatism in anything.
    Keynes and Friedman were hardly the first economists to make these arguments. There has been back and forth about the role of governments in economic cycles at least for three centuries, but in spite of this, economic results have never been totally predictable or controllable.

    Think about it. If these learned scholars could actually predict outcomes, why would there ever be a downturn, an depression, a recession or a bubble?

    It is because economies are as complex or perhaps more so than the universe. Billions of people making economic decisions, mainly for their own benefit. It's like predicting the weather, no the climate.
  13. Donation rwingett
    Ming the Merciless
    26 Oct '11 23:57
    Originally posted by normbenign
    A stopped clock is right twice a day. Regardless of you ideology, if you actually know anything about economics, you would have a bit more respect for a genius like Milton Friedman.
    I repeat...
  14. 27 Oct '11 01:27
    Originally posted by Kunsoo
    Because they've worked in the past - many times. Empirical data points for the benefit of policy.
    The condition of our economy is different than in the past. We now have a huge trade deficit and that means spending and tax cuts allow people to spend more money on the same imported goods that stimulates foreign economies more than ours.
    Until we bring back effective protectionist policies, spending and tax cuts will remain a dismal failure.

    What empirical data? Show me.
  15. Subscriber invigorate
    Only 1 F in Uckfield
    27 Oct '11 09:05
    Originally posted by rwingett
    Friedman was never correct about anything.
    Friedman would be more correct if the government was stronger.

    Companies would operate within the law not make the law. Companies paying politicians is a type of lawmaking.