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It is definitely true that borrowing money is quite cheap for the U.S. right now. Long term rates are low. The question is how much long term borrowing we can

It is definitely true that borrowing money is quite cheap for the U.S. right now. Long term rates are low. The question is how much long term borrowing we can do now without causing structural problems to the economy. After WWII our debt was quite high as a percent of GDP. High tax rates on the wealthy lowered the debt steadily until the Reagan administration. WWII was a massive government spending spree that got us out of the depression. It is definitely incorrect to say that more stimulus necessarily must lead to hyperinflation or other things predicted by the Austrian view of economics. WWII is a counterexample. This does not mean that more stimulus must necessarily make the economy better. Spending money paying for millions to go to college for free (essentially), as in the GI Bill after WWII had a tremendous benefit to the country. There are wise expenditures and unwise expenditures. The fact right now is that millions are out of work and even more or underemployed. People are suffering. It is sound and humane to take steps to help such people. During bad economic times it is generally wise to make major structural investments in society. During good economic times it is wise for government to pull back. The borrowing right now is only a problem if there is not enough future discipline by our leaders. They will need to raise taxes on the wealthy in the future to pay for the mess we need to get out of today.

kiba 16y ago
WWII is a counterexample. This does not mean that more stimulus must necessarily make the economy better Heard of the broken window fallacy? In any case, the shift to war productions cause the population some misery. You got rationing of essential foodstuff and the like. You can't buy anything you like. There was almost certainly no R&D money spent on consumer research. Never mind the fact that all the men went to wars! That's going to cause less employment. When a lot of men die, that make your employment statistics awfully good, doesn't it? Spending money on education is all well and good, but what about the dead GIs that we can't bring back to life? How many Einsteins, Teslas, and Neumanns die in that war anyway? We probably lost some of them in that war. Wars are just another case of digging holes and then filling it in again, except you're digging graves for dead soldiers, airmen, and sailors, and a whole perfectly good workforce too.
- yequalsx 16y ago
  Your response would be relevant if it addressed the point I made about using WWII as an example and if it lacked the sarcasm. WWII was a massive spending program by the government. It is credited amongst Austrian economists and Keynesians as the reason we got out of the depression. Therefore it is an example of how government spending can get a country out of a depression. It is incorrect to believe that government expenditures can never get us out of a depression. Is is also incorrect to believe that government expenditures can always get us out of a depression.
  - kiba 16y ago
    It is credited amongst Austrian economists That is clearly uncharacteristic of the Austrian school. I never heard of an Austrian economist saying that's the reason we got out of the depression. I have heard the Austrians arguing just the opposite. You will need to produce your claim that Austrian economists believe it to be so. Beside, nobody can detect sarcasm on the internet. There's no body language to detect. Addendum: Argument from authority is what you're arguing for getting out of the depression? The Keynesian and Austrians believe that World War 2 got us out of the depression therefore it is true is what you're arguing. That's unconvincing.
    - yequalsx 16y ago
      You do not understand the fallacy of argument from authority. I did not engage in this. If you think what I did was an example of the fallacy of argument from authority then you must think that people who insist that the person who performs their heart surgery be a heart surgeon are also engaging in this fallacy.
      - kiba 16y ago
        You do not understand the fallacy of argument from authority. I did not engage in this. Mere assertions is not going help you there. You have to explain why I am wrong.
bjnortier_hn 16y ago
I'm not convinced that reasonable comparisons can be made to the circumstances surrounding WWII. WWII was a far-from-equilibrium economic situation, and decisions around debt are very different from more "normal" economic situations.
- yequalsx 16y ago
  It's an example of how government expenditures can lead to conditions that foster economic growth and out of a depression. That was my only point regarding WWII. The mantra, "government spending is always bad" is, itself, quite bad. The mantra, "government spending is always good" is equally bad.

kiba 16y ago

WWII is a counterexample. This does not mean that more stimulus must necessarily make the economy better Heard of the broken window fallacy? In any case, the shift to war productions cause the population some misery. You got rationing of essential foodstuff and the like. You can't buy anything you like. There was almost certainly no R&D money spent on consumer research. Never mind the fact that all the men went to wars! That's going to cause less employment. When a lot of men die, that make your employment statistics awfully good, doesn't it? Spending money on education is all well and good, but what about the dead GIs that we can't bring back to life? How many Einsteins, Teslas, and Neumanns die in that war anyway? We probably lost some of them in that war. Wars are just another case of digging holes and then filling it in again, except you're digging graves for dead soldiers, airmen, and sailors, and a whole perfectly good workforce too.

yequalsx 16y ago
Your response would be relevant if it addressed the point I made about using WWII as an example and if it lacked the sarcasm. WWII was a massive spending program by the government. It is credited amongst Austrian economists and Keynesians as the reason we got out of the depression. Therefore it is an example of how government spending can get a country out of a depression. It is incorrect to believe that government expenditures can never get us out of a depression. Is is also incorrect to believe that government expenditures can always get us out of a depression.
- kiba 16y ago
  It is credited amongst Austrian economists That is clearly uncharacteristic of the Austrian school. I never heard of an Austrian economist saying that's the reason we got out of the depression. I have heard the Austrians arguing just the opposite. You will need to produce your claim that Austrian economists believe it to be so. Beside, nobody can detect sarcasm on the internet. There's no body language to detect. Addendum: Argument from authority is what you're arguing for getting out of the depression? The Keynesian and Austrians believe that World War 2 got us out of the depression therefore it is true is what you're arguing. That's unconvincing.
  - yequalsx 16y ago
    You do not understand the fallacy of argument from authority. I did not engage in this. If you think what I did was an example of the fallacy of argument from authority then you must think that people who insist that the person who performs their heart surgery be a heart surgeon are also engaging in this fallacy.
    - kiba 16y ago
      You do not understand the fallacy of argument from authority. I did not engage in this. Mere assertions is not going help you there. You have to explain why I am wrong.

bjnortier_hn 16y ago

I'm not convinced that reasonable comparisons can be made to the circumstances surrounding WWII. WWII was a far-from-equilibrium economic situation, and decisions around debt are very different from more "normal" economic situations.

yequalsx 16y ago
It's an example of how government expenditures can lead to conditions that foster economic growth and out of a depression. That was my only point regarding WWII. The mantra, "government spending is always bad" is, itself, quite bad. The mantra, "government spending is always good" is equally bad.