But Reiver, didn't people like you and progressives embrace the core of neo-liberalism? I know that was certainly the case in the US and Canada.
Nope. Its true that some centre-left parties drifted to the right, suggesting there was no alternative but to cheer an economic consensus. The empirical evidence shows that those parties subsequently lost ground. The likes of Corbyn, where UK Labour's slide has since been stopped, shows how rejection of neo-liberalism is supported by the mainstream left.
Maybe...but it's still nothing more than a political term. Every penny spent in the economy, no matter who is doing the spending, energizes that economy. Reaganomics only served to politically sensationalize how spending effects the economy...
Nope. As a label it demonstrates meaning. Neo-liberalism, as a label, has provided us with a means to fight back against lobby led market fundamentalism
Reiver, I've argued it's time to adopt a global counterbalance to neo liberalism, along the lines suggested by Keynes way back in 1944, at the Bretton Woods conference, with his "clearing union" concept. (Predictably the US - emerging from WW2 as the world's largest creditor nation - rejected the idea....somewhat ironic , given that the US is now the largest debtor nation - though I note your comments that this debt is not necessarily a bad thing). A common response is that such a concept (ie Keynes' "clearing union") is utopian. Perhaps it's more a matter of parties of the Left, world-wide, communicating with one another, to bring about the reformed IMF that is required.
This is an interesting angle. I had a slightly different view. I'd argue that things went pear shaped with GATT. We should have had the International Trade Organisation with development at its core. This would have ensured a more level playing field today and a less dysfunctional US. There's an irony that the US stopped it...
You do if you want to achieve validity and also refer to effective policy change. Labels, for example, provide the means to track costs and benefits such that we have the means to understand inefficiencies.
Not labels...hard calculations and performance monitoring relative to well-defined societal goals is all that is needed to move forward...
Forget economic modeling...look only to actual solutions to solve actual problems sans political bias...
Reiver, there's also the argument that all this borrowing might be having some (immediate) negative impact of its own. To think that the government can just inject money into the economy without taking money out of that economy in other ways. Surely government borrowing money puts an upwards pressure on interest rates, which the Fed (the central bank in the U.S.) tries to counteract but in doing so leads to inflation.
Economic modelling is crucial for finding solution. It's naive to think otherwise, given the complexities of the economy. Now modelling can be destructive. We saw that with Freidman's monetarism. We also saw it with the financial crisis, as the orthodox models used encouraged policy makers to sit on their hands. However, that only gives an excuse to vote for the superior policy makers...
I'm not naive and it's precisely because of the complexities of the economy why I prefer to review each issue on it's own merits and be open-minded to securing long-term solutions instead of trying to stereotype a certain model...
Usually, the actual reality can be best understood by applying a few different models, but the real problem is understanding in what proportions those different models create effects. Just because a certain model is true doesn't mean it's a good descriptor of what's happening in a particular situation in the economy. I'll give you an analogy from human genetics. People afflicted with Down syndrome have all the same genes as you and me, the problem just happens to be there's an extra copy of some of them. That throws everything off balance because the human development process is very dependent on genes being expressed in exact proportions, a ratio of one gene activity to another. Or if you're mixing paint. You can mix three different colors of paint together and get a very different resulting color than someone else, even though you both used the exact same three types of paint to start off with.
Your error here is "a certain model". You choose a school of thought. That then allows for debate over the nature of the model. There's really only two outcomes here. You can adopt the Blairite 'third way' and forget all principles. Alternatively, if you believe in a pluralist approach, you adopt an approach which has inherently learnt from multiple schools (e.g. post Keyensianism and it's links to Institutionalism, Marxism and organisational economics)
I'm not interested in adopting any single approach. If we could do that we simply can fill the computer with algorithms and let it make all the economic decisions. I cannot accept a broad brush approach to something so complex and dynamic...
There isn't one approach (e.g within post Keynesianism there is debate). But if you don't choose a particular economic school then you have no spine to your analysis
Last month for the 28th month in a row spending growth exceeded income growth as Americans go further into debt.In a truly healthy economy savings would be growing not debt!!
Why would high savings be a sign of health? Surely either debt or high savings is an example of an economic imbalance (e.g. China versus US)
If consumers have confidence in the economy, or specifically have confidence in their economic position, they will be inclined to establish more debt as they purchase cars and homes and vacations, etc. If consumers are racking up more debt buying common essentials or reckless debt spending to keep up with their peers, this IMO is unhealthy...