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sugar
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Joined: 07 Aug 2004
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Location: Morrinsville, New Zealand
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 Posted: Sat Jun 16, 2012 7:38 pm Post subject: Keynes trumps the Austrians yet again |
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| Quote: | Still A Phantom Menace
The policy response to financial crisis has, in effect, given us a great natural experiment in macroeconomics — an experiment that can and should be viewed as a test of two views of the economy. One view — which includes both freshwater macro and much of what Austrians say — is in effect classical macro as Keynes described it, in which the economy is always constrained by supply. The other is a more or less Keynesian view in which a depressed economy is constrained by demand, not supply.
These two views had strong implications on three fronts. One was interest rates: would large budget deficits drive rates up, as a classical view implied, or would they do no such thing under depression conditions? A second was the effects of austerity (which has been much larger than the weak efforts at stimulus, and therefore provides the real test); would austerity policies release resources to the private sector, as per the classical view, or lead to economic contraction? Finally, a third implication involved inflation: would large increases in the monetary base produce soaring inflation, again as classicists of all kinds claimed, or do no such thing under depression conditions?
You know how things have gone on the interest rate and austerity fronts. Let’s do an update on inflation.
Early last year the inflationistas were yelling a lot; commodity prices had jumped, and they were shouting that high inflation was just around the corner, with much talk of debasing the currency and all that.
Whoops
..........................
Finally, I just want to flag this for the record:
| Peter David Schiff wrote: | | Regardless of what the triumphant Keynesians would have you believe, my analysis continues to be that the current combination of monetary and fiscal stimulus is driving us toward disaster. Instead of a real recovery, the US will experience an inflationary depression. Europe, on the other hand, will suffer much less, precisely because it was not seduced by the short-term appeal of stimulus. |
Yep. |
http://krugman.blogs.nytimes.com/2012/06/15/still-a-phantom-menace/
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Prenj
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Joined: 20 Nov 2011
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Location: Mostar, BiH
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| Posted: Sat Jun 16, 2012 7:46 pm Post subject: |
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| Economy works according to the design. As evident. Design was never so that you can profit. |
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BoneKracker
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| Posted: Sat Jun 16, 2012 8:06 pm Post subject: |
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sugar has gone from being a "Social Credit" commie to a Krugman-following Keynesian. 
http://en.wikipedia.org/wiki/Mike_the_Headless_Chicken
There hasn't really been any "austerity"; more talk about it than anything. In the U.S., there has been virtually none, and Government spending continues to grow. We are up to almost $900 Billion in deficit spending already for FY '12, and it's only mid-June.
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tylerwylie
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Joined: 19 Sep 2004
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| Posted: Sat Jun 16, 2012 8:11 pm Post subject: |
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lol
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Muso
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Joined: 22 Oct 2002
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Location: The Holy city of Honolulu
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| Posted: Sat Jun 16, 2012 8:27 pm Post subject: |
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| BoneKracker wrote: | | sugar has gone from being a "Social Credit" commie to a Krugman-following Keynesian. |
He's a clueless zealot cultist of the state.
I couldn't have said it better myself
Also, I found this rather fitting.
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BoneKracker
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| Posted: Sat Jun 16, 2012 8:38 pm Post subject: |
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Amazing how history repeats.
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mcgruff
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Joined: 28 Dec 2004
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| Posted: Sat Jun 16, 2012 10:16 pm Post subject: |
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Keynes trumps the Austrians... not really a fair fight is it?
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BoneKracker
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| Posted: Sat Jun 16, 2012 10:44 pm Post subject: |
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Please use the proper term: Ostriches.
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energyman76b
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| Posted: Sun Jun 17, 2012 11:07 am Post subject: |
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well, look at Greece - spending cut, economy broke down.
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Libertardian denial of reality is wholly unimpressive and unconvincing, and simply serves to demonstrate what a bunch of delusional fools they all are.
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BoneKracker
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| Posted: Sun Jun 17, 2012 3:05 pm Post subject: |
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| energyman76b wrote: | | well, look at Greece - spending cut, economy broke down. |
I am impressed by the clarity and precision of your insightful analysis.
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energyman76b
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| Posted: Sun Jun 17, 2012 4:05 pm Post subject: |
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| BoneKracker wrote: | | energyman76b wrote: | | well, look at Greece - spending cut, economy broke down. |
I am impressed by the clarity and precision of your insightful analysis. |
there is not much to analyze. You can look at the charts at tagesschau - all those countries who cut spending have negative or very reduced growth.
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| AidanJT wrote: |
Libertardian denial of reality is wholly unimpressive and unconvincing, and simply serves to demonstrate what a bunch of delusional fools they all are.
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Satan's got perfectly toned abs and rocks a c-cup. |
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pjp
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| Posted: Sun Jun 17, 2012 4:15 pm Post subject: |
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| energyman76b wrote: | | all those countries who cut spending have negative or very reduced growth. |
We've increased spending and have reduced growth.
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BoneKracker
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| Posted: Sun Jun 17, 2012 4:17 pm Post subject: |
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| energyman76b wrote: | | BoneKracker wrote: | | energyman76b wrote: | | well, look at Greece - spending cut, economy broke down. |
I am impressed by the clarity and precision of your insightful analysis. |
there is not much to analyze. You can look at the charts at tagesschau - all those countries who cut spending have negative or very reduced growth. |
Aha! Then obviously the cut in spending is what caused the reduced growth! Q.E.D. 
It could not be that the countries in the worst economic trouble are the ones who had to cut spending, because that would not as conveniently fit the left-wing dialog.
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juniper
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| Posted: Mon Jun 18, 2012 1:33 pm Post subject: |
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| BoneKracker wrote: |
Aha! Then obviously the cut in spending is what caused the reduced growth! Q.E.D.
It could not be that the countries in the worst economic trouble are the ones who had to cut spending, because that would not as conveniently fit the left-wing dialog. |
causation hasn't been established as you rightly point out. However, explaining the correlation would be useful, no? |
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BoneKracker
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| Posted: Mon Jun 18, 2012 5:47 pm Post subject: |
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| juniper wrote: | | BoneKracker wrote: |
Aha! Then obviously the cut in spending is what caused the reduced growth! Q.E.D.
It could not be that the countries in the worst economic trouble are the ones who had to cut spending, because that would not as conveniently fit the left-wing dialog. |
causation hasn't been established as you rightly point out. However, explaining the correlation would be useful, no? |
Why should I. It's not germane to my point. All I wanted to do was point out the complete lack of validity of his logic. If you want to talk about ostriches, feel free to talk about ostriches.
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