The Failure of Keynesian Economics

Demolished? ROTFL

Sarcasm isn't fact.

 

I didn't bother with sarcasm. Just good ole political economy and an understanding of capitalism's innate instability

 

Was it not the failure to regulate wall street that lead to this whole mess???

That is, NOT following keynesian economic policy of a regulated financial sector caused a meltdown and now a return to keynesian economics are slowly pulling us out of the mess.

Wall street was given free reins and immediately went Kurt Cobain on us.

 

economics is not that complicated actually. No different than managing your own household budget!

 

You're mixing it up with accountancy. Bad mistake!

 

how do you figure? In a houshold you spend within your means and save for a rainy day correct? Many a nation could learn from such basic principals!

 

'Managing a budget' gave the game away. You're not showing any appreciation of economic costs and benefits; thus its on a par with a grey suited accountant

 

so you are saying that balancing the federal budget and having trade surpluses are not beneficial to the country?

 

I'm saying that comparing the economy to a household budget is a clear abuse of accountancy, demonstrating no appreciation of economic analysis

 

basic common sence...spend withing your means ( balance the budget) and save for a rainy day ( trade surpluses along with foreign exchange reserves) seems quite basic to me!

 

Basic common sense would inform us of the need to utilise sound economic analysis, rather than just giving a terribly simplistic accountancy-fueled outlook of no value at all. For example, the basic household doesn't have to be concerned about hysteresis in unemployment and the destruction of human capital. Not even Auntie Mabel!

 

Most households don't balance their budgets either. The average American household has over $15,000 in credit card debt. The average American household has about $48,000 in overall debt. Considering the fact that the average US household income is lower than that, we tend to be severely in debt.

Just like most Americans are unwilling to resist the urge to buy a new car, TV, DVDs or cell phone, they don't want government to hold back either. They are unwilling to give up their cakes and circuses, even though the government providing these benefits is spending itself into poverty.

 

all that keynessian crap along with adam smith's invisible hand is just there to confuse....and by confusing people you can introduce a bunch of useless formulus that end up doing more harm than good!

 

well then there you go....the perfect recepie to total collapse...this game of spend spend spend can only go on until the creditors ( mainly chinese and japanese money) stop loaning. Thats when the currency crisis hits and it wont be pretty!

 

I would agree that economics isn't for right wingers!

 

actually I would say that keynessianism is not for economists

 

I would prefer if Keynesianism didn't exist. Capitalism would have failed and we'd be able to introduce a more dynamic economic paradigm. That Schumpterian creative destruction 'long term' is just too long

 

socialism has never worked throughout history...mind you capitalism is not perfect but its the best system that we have right now!

 

You're out-of-date. The socialist calculation debate has been won

 

LOL yeah right look at the former USSR and all the other comunist countries that failed...even china has its butt saved because they embraced capitalism!

 

State capitalism

Market socialist, but not a form that I support or cherish

 

The failure is in Obama's persuit of increased government spending and creation of a new entitlement, nationalized healthcare. If instead he focused his first two years on economic recovery programs instead of government only solutions, we could have a vibrant growing private sector economy, which would bring with it the jobs and the government revenues to aid in balancing the budget. Instead we have growing deficits, shrinking savings, limited investment capital, growing regulations, real unemployment over 20% for 3 full years, and an increasing disparity between private sector and public sector salaries. Even under the wise leadership of 2 full years President Obama and a Democratic House and a Democratic Senate, unemployment continued to rise and the gap between the rich and the poor got bigger and bigger. Real wages have actually declined.

 

I think that you are forgetting that Obama inherited a house on fire. It takes time to turn things around. Things ARE getting better...but it might not be due to Omaba at all.

Basically, I don't think that government has as much control over the economy as everybody seems to think. They just have to ride out the business cycle like everybody else. The cycle of boom and bust goes back to at least the 1600s. The economy will recover on its own no matter what.

The increased government spending is well in line with the keynesian economic school. So what Obama does makes sense if you believe in this school of economics. Deficit spendings is part of the plan. Just too bad that there already was a huge debt. That is the REAL failure here.

President after president has failed to pay off on the debt and most have just added to it. It was too easy just to push the problem onto the next president. Too bad for Obama that he was on the watch when this (*)(*)(*)(*)load could no longer balance and tipped over. I feel sorry for him, I really do.

 

No form of Capitalism ever existed until Keynes?

Keynesianism bastardized Capitalism by justifying government interference, resulting in the politician / regulator / industrial complex. Corporations feed government so government sells out the public in favor of the corporation.

That is because Marx and Schumpeter were wrong.

Destruction kills unsuitable products, freeing up resources for Creating viable ones. That natural evolution is suitable for Capitalism, because it can't be "planned" near as effectively.

 

We've seen significant changes reflecting the rise of the managerial class and the exploitation of economies of scale. Whilst that opens up both producer and consumer opportunitties, it also increases the risk of economic crisis

You crow Marx and Schumpeter are wrong (despite their continued importance for modern economic analysis) and then provide a rather vacuous statement.