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First, the bank bailout was successful in its primary goal -- do you see a global collapse of financial lending? Second, the market is actually doing quite wel

First, the bank bailout was successful in its primary goal -- do you see a global collapse of financial lending? Second, the market is actually doing quite well, as predicted. Jobs, on the other hand, are not so great. Basic economics predicts that stimulus via infrastructure spending is the best way to accelerate growth in the job market -- which is exactly what we didn't do. I have no idea where you got the idea that this recession was treated with an all-out spending spree. It wasn't. The same fiscal austerity measures that are failing Europe are going to be implemented in the US and fail just as badly.

jerf 15y ago
"Basic economics predicts that stimulus via infrastructure spending is the best way to accelerate growth in the job market -- which is exactly what we didn't do." Which is why I carefully qualified my statement with bastardized Keynesianism. I don't mean that as a pure insult; I don't particularly believe it's the best economic model, but I don't have much evidence either way w.r.t. the current situation, because it isn't what our government is actually using. It's what it claims to be using as cover, but take Keyne's theories and feed it the actions of our government, and the anemic recovery and ballooning debt is pretty much what it predicts too. Proper government spending may be the best way out of a recession (I'm very skeptical about it, but it may be true), but even Keynesian theories would seem to say that no spending would better than spending that has a less-than-unity "multiplier". I am much, much less willing that most people to simply assume without actual evidence that spending must have a over-unity multiplier, and I don't see much evidence that our current spending does. "I have no idea where you got the idea that this recession was treated with an all-out spending spree" Reading what Keynesianism says and comparing it what money is actually being spent. The so-called "stimulus" has virtually no relationship to what the theories call for (it isn't quite zero, but spending that actually conformed to Keyne's theories were in the high single-digit percents of ARRA last I knew), and there doesn't seem to be any other really compelling philosophy behind ARRA, so barring some other coherent explanation of how the actions of the government are supposed to be helpful, I'll characterize it as an all-out spending spree. It isn't that big of a leap. You just have to look at what is actually being done, and not what is being said.
- Locke1689 15y ago
  You just have to look at what is actually being done, and not what is being said. Yes, but what you said is: Yes, that's the theory. But look around you. Is it working? No. We're doing way worse than those recessions where we instead responded by cutting taxes and actually living within our means. This theory is wrong. This implies that the Keynesian theory of stimulus spending is wrong but you yourself admit that what is actually being done is not what is suggested by theory, it is some strange bastardized form. Actual Keynesian theory has been practiced in previous times and has succeeded relatively well. Even in this recession, the Scandinavian economic response is mostly Keynesian and they have weathered the recession very well.
  - jerf 15y ago
    "This implies that the Keynesian theory of stimulus spending is wrong" Actually, we brought in the word "Keynesian" later. The original message I was replying strikes me as being based on the idea that it's just "spending", especially at the point where it claims that the Great Recession is from us "living within our means", which is a claim that just boggles my mind. The theory is that unqualified government spending is what pulls economies out of recessions; the reality is that isn't working, and also, it's not really Keynesianism. No contradictions.

jerf 15y ago

"Basic economics predicts that stimulus via infrastructure spending is the best way to accelerate growth in the job market -- which is exactly what we didn't do." Which is why I carefully qualified my statement with bastardized Keynesianism. I don't mean that as a pure insult; I don't particularly believe it's the best economic model, but I don't have much evidence either way w.r.t. the current situation, because it isn't what our government is actually using. It's what it claims to be using as cover, but take Keyne's theories and feed it the actions of our government, and the anemic recovery and ballooning debt is pretty much what it predicts too. Proper government spending may be the best way out of a recession (I'm very skeptical about it, but it may be true), but even Keynesian theories would seem to say that no spending would better than spending that has a less-than-unity "multiplier". I am much, much less willing that most people to simply assume without actual evidence that spending must have a over-unity multiplier, and I don't see much evidence that our current spending does. "I have no idea where you got the idea that this recession was treated with an all-out spending spree" Reading what Keynesianism says and comparing it what money is actually being spent. The so-called "stimulus" has virtually no relationship to what the theories call for (it isn't quite zero, but spending that actually conformed to Keyne's theories were in the high single-digit percents of ARRA last I knew), and there doesn't seem to be any other really compelling philosophy behind ARRA, so barring some other coherent explanation of how the actions of the government are supposed to be helpful, I'll characterize it as an all-out spending spree. It isn't that big of a leap. You just have to look at what is actually being done, and not what is being said.

Locke1689 15y ago
You just have to look at what is actually being done, and not what is being said. Yes, but what you said is: Yes, that's the theory. But look around you. Is it working? No. We're doing way worse than those recessions where we instead responded by cutting taxes and actually living within our means. This theory is wrong. This implies that the Keynesian theory of stimulus spending is wrong but you yourself admit that what is actually being done is not what is suggested by theory, it is some strange bastardized form. Actual Keynesian theory has been practiced in previous times and has succeeded relatively well. Even in this recession, the Scandinavian economic response is mostly Keynesian and they have weathered the recession very well.
- jerf 15y ago
  "This implies that the Keynesian theory of stimulus spending is wrong" Actually, we brought in the word "Keynesian" later. The original message I was replying strikes me as being based on the idea that it's just "spending", especially at the point where it claims that the Great Recession is from us "living within our means", which is a claim that just boggles my mind. The theory is that unqualified government spending is what pulls economies out of recessions; the reality is that isn't working, and also, it's not really Keynesianism. No contradictions.