Republicans have already folded to Trumpism. They have passed a budget that adds $9 trillion in debt. Of course they were given a fig leaf by attaching an ACA measure to the massive spending bill.
Right wing fanatics Ted Cruz and Mike Lee helped it to pass while Rand Paul opposed the measure.
I miss “obstruction” already. Of course those who missed when Washington “worked” should be thrilled, right?
Maybe Krugman will applaud this delicious new debt.
This was probably an unfair question. The vast majority of bubbles are not seen as bubbles at the time. It’s only when they burst that they are labelled a bubble.
This is not true at all. Trickle Down economics was a term coined by critics of Reagan. It’s not a term that is advocated by those who otherwise support Reaganomics. Trickle down economics is a bastardized term for supply side economics. Supply side economics has a very good record at bringing prosperity to countries around the world.
Eh?
No, the American idea of the supply side economics has not any particular track record outside of the USA (and it by the emperical evidence did not have a great record in the USA in comparison with its claims). Of course it is only a focusing on a specific aspect of the modern consensus economic theory of the neo-classical synthesis.
It can be said the neo-classical synthesis economics has a very good track record, but that is not the same as this strange american distortion.
Supply-side economics is basically right-wing Keynesianism, promoting fiscal stimulus in the form of tax cuts instead of spending schemes. The goal of goosing macro aggregates is the same as your neo-classical synthesis.
Only if viewed through stange non empirical fringe theories
[QUOTE=WillFarnaby;19903958**]
Supply-side economics is basically right-wing Keynesianism, promoting fiscal stimulus in the form of tax cuts** instead of spending schemes. The goal of goosing macro aggregates is the same as your neo-classical synthesis.
[/QUOTE]
Tax cuts are only part of the policy. I do not know the strict definition of supply side economics, and I suspect it means slightly different things to different economists, but stable monetary policy and cutting red tape are both highly important to most supply side economists. It is far, far more than stimulus via tax cuts.
Not unfair at all. This thread is in Great Debates, not IMHO or the Pit. Evidence is required for such claims.
Is the goal of your neo-classical synthesis economics to engage in stimulus in order to boost macro aggregates?
Yes you are right, but in practice supply side economics has basically meant tax cuts because that is the only thing they were able to achieve politically.
Do you think all infrastructure programs are equivalent to each other? I’m not asking what you think the Nobel Prize-winner you feel so smugly superior to thinks; I’m asking: Do you think all infrastructure programs are equivalent to each other?
In particular, do you think companies lining up at the GOP trough to receive many $billions in tax subsidies is equivalent to targeted repairs of government roads, bridges, and levees?
You don’t seem fond of, nor knowledgeable about, Paul Krugman. Please also tell us your opinion of Messrs. David Dunning and Justin Kruger.
I’ve no idea what Krugman actually said, but it’s no secret that economic activity generally increases economic activity (and employment). I demonstrated a variation of this to you once with an extremely simple example: An island with only two actors, Crusoe and Friday, where Crusoe damaging Friday’s boat led to a better boat. You weren’t even able to understand that model. :smack: And then blamed your own confusion on the excess simplicity of a 2-player economy. :rolleyes: Should I try again with a 3-player model?
I’m unclear whether your thoughts are dominated by disgust for the Nobel Prize-winner … or just inchoate confusion.
Now you’re finally making sense!
And evidence only really comes after the fact. That’s why the question was unfair imo. We are talking economics here. During the housing bubble it would have been almost impossible for any doper to prove a housing bubble, despite every economist and their dog now claiming that they recognized the housing bubble as it happened.
The problem I have with all such debates about economics, isn’t the lack of “credentials” of the participants.
It’s the lack of the most basic recognition of how an economy actually does, or does not, truly grow.
There are two basic kinds of economic growth: fake, and real.
Fake growth is when the rules are rearranged, in order to allow the cash that is supposed to only REPRESENT actual wealth, gets labeled as being the wealth itself, and then tricks are played to pump up how much of it there is.
Real growth, is when wealth is actually created. Not just cash.
That is very difficult to understand, because a lot of what looks like it’s just cash being tossed around, IS actually real growth. And when someone does manage to play games that cause a big pile of cash derived from FAKE growth to show up, it is sometimes used (until everyone realizes it’s fake) to bring about actual growth.
Real economic growth only takes place, when real goods and services are produced, that are useful to, and affordable to, the bulk of the economic population.
We have seen in the last thirty years, a series of FAKE GROWTH bubbles, that serve as good examples of what NOT to invest in.
So that bubble burst.
Next came the Real Estate bubble. Investors thought that the price of real estate would forever climb at the outrageous rate it had done during the dot com bubble, having failed to connect the false wealth of that previous bubble, to the equally artificial rise in real estate prices. So they decided to start giving out loans based on what the properties WOULD come to be valued at, should the prices continue to rise unabated. They rewarded their debt sales people for the value of the loan, rather than for the ability of the borrowers to pay, which led directly to what we now call the Subprime bubble. It was extended and doubled in size, by adding the trick of hiding all the bad loans inside “derivatives,” so that that bubble became so large, that it almost destroyed the entire planet’s economic system when it inevitably burst.
Why did those bubbles burst? Because no real wealth filled them up, once the cash started to flow into them. The vast sums of cash being tossed around, was never in the hands of what should be called The Customer Class.
Goods and services remained mostly unaffordable to the customer class, so there was no need to produce any more of them. That meant that there was no reason for any business to hire more people or open new factories, because they had product sitting on the shelf already, that no one was buying. No INTELLIGENT business owner, expands their business when they have no customers.
That is why every time the Republicans managed to push through yet ANOTHER tax cut for the “investor class,” almost none of the money was invested as they kept promising it would be, in higher wages or increased jobs.
It isn’t SELFISHNESS of the Investor Class that caused this, it is the concerted stupidity of the “economists” who insist that growth takes place when cash is dumped into rich people’s pockets, and not when customers buy newly produced things.
The reason why such tax cuts HAVE seemed to work to spur real growth in the past, is because the circumstances then were entirely different.
After each of the World Wars, for example, because the rest of the planet was desperate to buy things that they could no longer produce, and American factories could supply them, making more money available to investors to build extra capacity,worked extremely well. But after the rest of the world’s factories came back online, ours were no longer needed, and so we suffered a depression, exacerbated by another “investment alone makes wealth” bubble (I’m referring to the Great Depression).
After WW2, we had almost the same thing happen, with the difference that the United States was partially buffered from suffering another over-capacity glut depression, by the expansion and threat of communism, combined with the sudden end to the great World Empires of France and Britain, giving us tons of new markets who could not produce their own goods. That dreamworld fell apart in the 1970’s, and was only temporarily saved by the wild spending that Reagan’s people indulged in.
Now the Republicans have become completely deluded, that real wealth is created by reducing rich people’s taxes. So they are going to lower them more and more, until the “magic” works, even if it means putting an end to the entire American Middle Class, because they see us as being the cause of high wages, and the source of low profits in business.
They still haven’t noticed that real CUSTOMERS need to buy things, for investment to create wealth.
They are all equivalent in that when they are executed by governments, there is no voluntary exchange involved. The only way wealth can be demonstrated to have been created is through voluntary exchange.
Well your characterizations of the two options tell us everything we need to know.
Your “targeted repairs” must be contracted to those who are politically connected. I understand why some people are upset that these crony deals will benefit those connected to Trump and not connected to Clinton. I see crony deals as crony deals, whether they are brokered by Democrats through traditional mechanisms or Republicans through novel mechanisms.
I have no delusions as to Krugman’s superiority in his very narrow area of expertise. Unfortunately for him and his apologists, this is not his in his bailiwick. He may have picked up on some stuff as an undergrad, good for him and his apologists. I also will never hold a candle to Krugman on political hackery and abdication of integrity.
You mean when you unveiled to the world your -interesting- view on money. I forget, do IOUs count in M1 or M2? lol.
I agree that you are unclear.
I will go ahead and mention/propose that Health Care costs in the USA have been setting up like it.
A big red bubble as Hans Rosling would point out.
You only need to watch question #6 and the reply.
Back in 2011 The USA’s big red bubble represented us spending 15% of GDP in health care costs per person; and yet countries like Switzerland spent 11% of their GDP and get a higher life expectancy than the USA. Currently that big red fat bubble is getting higher than 17%.
Someone help me out here. Is there a single word here that isn’t wrong?
You didn’t answer the question, but your answer is quite revealing nonetheless.
Are you seriously making the claim that all government contract work is “crony deals”? And that the only people who get infrastructure work are those who are “politically connected”? Then please, by all means, explain to us how the contracting worked on the ARRA highway spending back in 2009. What “political connections” would a company have needed to get one of those juicy “crony deals”?
Once again, we have this ridiculous cynicism that because something is a little bit shit, it’s therefore exactly the same as something that is complete shit. Except in this case, we have yet to see any evidence that the thing that isn’t demonstrably complete shit is shit at all. No, bidding on government contracts like that is not the same thing as what Trump is doing. And there is no reason to believe, that had Clinton pushed an infrastructure program, it would have been given first and foremost to “people connected to Clinton”. Or is there? By all means, if you have evidence (and I mean evidence, not a reflexive and unreasonable distrust of all things government) be my guest.
The money the government spends is involuntarily taken from taxpayers. Taxpayers are not engaging in transactions with road-builders voluntarily.
My claim was the only way wealth can be demonstrated to have been created is through voluntary exchange.
In a voluntary exchange each party must value the good or service obtained through trade greater than the good or service relinquished in trade. This is how wealth is created. A voluntary exchange demonstrates that wealth has been created.
Explain how wealth can be demonstrated to have been created in an involuntary exchange.
No. I was responding to the other poster. I did not decide to change the subject.
According to Krugman, infrastructure creation is a mere byproduct of fiscal stimulus.
I’m sorry if skepticism offends your sensibilities and quasi-religious beliefs in democracy. Perhaps you can also demonstrate how a contractor can get a government job without being connected to the government.
Collectively they are. If a majority of taxpayers did not want government-funded roads, we would not have government-funded roads. I think it’s fair to say the vast, vast majority of taxpayers want government-funded roads. Granted, there may be some tiny minority of ill-informed people who think that public roads are a bad idea, but part of living in society involves doing things you don’t want to do, and that includes paying taxes towards things most people want.
If it is involuntary but would have occurred on a voluntary basis anyways, or if the only reason it would not have occurred on a voluntary basis involves poor decision-making on one party, then there is effectively no difference in theory - both parties are receiving more than what they started with. That’s just the most base-level, armchair rebuttal, working within your limited definition of wealth. In more broad terms, there are a great many government actions which I could point to which I doubt you would call “voluntary exchange” which undoubtably have created untold wealth for all involved parties. The highway system is the most obvious example. Sure, it wasn’t a “voluntary exchange” in the way you seem to think of it, but if you think we aren’t better off with the public highway system, then I’m going to have to move the rest of this conversation to the pit.
Can you quote Krugman in his own words on this? I’d rather not take your word for it after post #32. And even then, you did not answer the question; instead, you took it off on a bizarre tangent about “wealth creation”, something which your philosophy rejects altogether when it comes from a government.
Again, you are simply assuming that the other side is just as shit. No basis for it, just rank assumptions that because your side is shit, everyone else is just as shit. That’s just not the case. Can you point to any examples of cronyism in Clinton’s defense department that even come close to this level? Unlike Trump, we actually have a political background to fall back on with her, so we can look and see what her record is.
That’s not skepticism. That’s cynicism, wherein you just assume the worst of everything regardless of what the actual evidence is. And a particularly dangerous and counterproductive form of cynicism at that, where you use the shittiness of things that are demonstrably shit to imply that everything else is shit, then immediately turn around and use that to accept the shittiness of the originally shitty thing! This is like the kind of person who says, “Breitbart is awful, but I’m sure everyone else is just as bad, so I’m going to keep reading Breitbart because everyone else is just as bad”. That’s shitty. That guy is shit. Don’t be that guy.
And as for your question, it’s really simple:
Hey look, a place where any company, regardless of their political connections, can bid on open government contracts! And that’s just one answer, immediately found by 10 seconds on google. If you’re a company that wants to get government contracts but doesn’t want to cozy up to regulators, it’s entirely possible to do so. Sure, you’ll still have to work with the government, because they’re who is paying you, but that can’t be what you’re talking about here, right?
Where did you study economics? Material wealth, in the form of goods and services, is distributed through the market, but the market doesn’t create wealth as such. That sounds completely wrong to me. Voluntary exchange doesn’t create the material culture so much as nourish its creators. And the “voluntary” part is really not that important, as many a medieval conqueror could tell you.
I just wanted to commend Igor on his post. That was a great summation of everything that is wrong with our economy. We are all busy trying to divide up our share of the pie, but we don’t ever plan on how to make the pie larger.