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John Maynard Keynes, referring to the fact that you can’t simply implement spending cuts or smaller budgets on a government that is institutionally or structurally large. You must cut down the size of that government, structurally, before spending cuts can be implemented.
I’d only support Keynesians if they had the data to back their shit up.
Wage/price stickiness is very accurate and it does exist.
However, the crux of the Keynesian solution is increased government spending (along with loose monetary policy, which is another post altogether).
The Keynesian…
Keynes wasn’t for high deficits, nobody is for high deficits. When did it become Keynesian to be in favor of high deficits?!
If Keynes were alive I suspect he’d be in favor of keeping taxes low, reducing wasteful spending, less military spending, welfare reform that strives for employment, more infrastructural programs to convert to domestic energy. Strengthening the education system. And tariffs.
I don’t quite agree with the last one. But anyway, this idea that Keynes was always in favor of government spending is bullshit. He was in favor of spending where and when necessary. Governments have abused that idea a great deal.
Has anyone been looking at Germany?
In the financial crisis Germany used stimulus, what they did was pretty Keynesian. Their economy is doing well compared to the rest of the world.
Keynes didn’t believe in deficit? His entire system worked on debt. He’s been quoted numerous times saying, “Owe your banker £1000 and you are at his mercy; owe him £1 million and the position is reversed.”
(via nolife-likelowlife)
I’d only support Keynesians if they had the data to back their shit up.
Wage/price stickiness is very accurate and it does exist.
However, the crux of the Keynesian solution is increased government spending (along with loose monetary policy, which is another post altogether).
The Keynesian multiplier needs to be ridiculously high (I remember reading Cochrane saying it needed to be 5 for a meaningful stimulus right now) which no one has proven nor does any historical data show that stimulus “sparks” the economy into life.
In fact, most Keynesians cry foul when the government stops spending money - look at World War II and all the economists who said the economy would tank because no one spends money.
Long-run growth is what needs to be focused on. That means no high deficits, decreased gov’t spending (so we don’t crowd out productive investment) and stuff like that.
So yeah, Keynesians have a few good insights, but mostly bad solutions.
Keynes, in his own preface for General Theory, admits that the most efficient way for his theory to be executed is for it to function within a totalitarian state…
http://www.scribd.com/doc/5858/Keynes-John-Maynard-General-Theory-of-Employment-1936
People should have gotten as far as the preface and thrown the book in the trash.
John Maynard Keynes, 1945 (via letterstomycountry)
Right, this is why the Keynesian theory promotes insurmountable debt and endless borrowing from the central banks.
I love when LALiberty’s photo makes the rounds on tumblr.
It’s gotten 400 upvotes on r/Libertarian, too.
Ha. And my original post sits with a paltry 77 notes.
I remember when I took this picture, my wife found me and said something along the lines of “Who spends five minutes in the philosophy section laughing hysterically by themselves?”
I was on vacation and only days away from this and this in places where people drive on the wrong side of the road and coconuts are used as cocktail containers… So I was in high spirits.
Perfect.
I should one day post about why Keynesian wasn’t as crazy as some of us Austrian’s believe.
His ideas might be what we blame today mostly because they are the root of all our problems, but in a vacuum, Keynes’ philosophy was brilliant in a way. I don’t advocate it, but it was brilliant in the same way Marx was brilliant.
I’ll stop there before anyone gets the wrong idea about me.
(via laliberty)
