We're all Keynesians now

Races for the Senate, U.S. House, etc. and other issues of national importance.
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Re: We're all Keynesians now

Postby kurt_w » Thu Dec 06, 2012 6:46 am

Getting back to the title of this thread ...

I wrote it to tweak the noses of those who have spent the past four years moaning and groaning about how Keynes is wrong, stimulus is useless, and our highest priority ought to be cutting the deficit.

Well, unless we do something to stop it, now we're about to enact a massive dose of anti-stimulus. We're going to do exactly what Keynes says we shouldn't do. In a weak economy, we're going to prioritize deficit-cutting and austerity rather than stimulating economic growth.

And a lot of the people who were advocating for this austerity are now starting to panic. A lot of those people advocated spending cuts because they basically see poor and working-class Americans as shiftless, weak, unproductive moochers, people who need a stiff dose of economic pain to teach them the value of hard work and self-discipline. (Sound familiar? It's the Romney 47% speech in a nutshell). The Wall Street Journal normally advocates for low taxes, but during the Bush years it actually proposed raising taxes on these "lucky duckies" as a way to teach the working class to hate government just like the rich.

But it turns out that this looming dose of austerity isn't going to just hurt those undesirable "moocher" types. It's going to hurt good stalwart Republicans too, defense contractors, real-estate agents, investors, owners of car dealerships, health-care industry executives ... the upper-class and upper-middle-class people who it turns out actually benefit the most from the US economy.

People are right to be worried about this impending austerity crisis. If you look at the large English-speaking countries over the past four years, Australia has pursued the most traditional Keynesian policies and has suffered the least, while Great Britain adopted the biggest anti-Keynesian austerity program and has suffered the most. The US has been somewhere in the middle, with neither much actual stimulus nor large spending cuts, and our outcome has been correspondingly middling.

There is a long-term (next decade) need to bring government spending and revenue into closer agreement, the way they were before George Bush took office. But right now, when inflation is nonexistent, interest rates are low, millions of people are out of work, and economic growth is anemic, this is definitely not the time to be worrying about cutting the deficit.

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Re: We're all Keynesians now

Postby minicat » Thu Dec 06, 2012 8:33 am

green union terrace chair wrote:The partisan squabbling is the same as ever. If you take sides in this R v D debate, you're a fool and a sucker for the "fight." It's the same old shit.

Partisan squabbling has been going on forever, yes. However, anyone arguing the total obstructionism taking place since Obama's first election is "normal" is misguided at best.

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Re: We're all Keynesians now

Postby Stella_Guru » Thu Dec 06, 2012 12:22 pm

minicat wrote:Partisan squabbling has been going on forever, yes. However, anyone arguing the total obstructionism taking place since Obama's first election is "normal" is misguided at best.

Where is Frantz Fanon when you ned him?

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