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FTFA: > the world economy as a whole owes money to itself. > debt is money we owe to ourselves Why don't we just collectively forget/forgive our debts, then?

by innguest 12y ago

FTFA: > the world economy as a whole owes money to itself. > debt is money we owe to ourselves Why don't we just collectively forget/forgive our debts, then? Folks, if you think this astrologist/alchemist Krugman is doing scientific work in Economics, please stop and think: can you come up with a falsifiable statement for Keynesian Economics? I can come up with several for Evolution, which is why Evolution is a Science.

deleted 12y ago
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jhulla 12y ago
Krugman's argument fails to see the massive misallocation of capital worldwide and the resulting instability and wealth distortion. Just like he didn't see the 2008-2009 crisis, his models cannot see the current distortions and where they mar or may not lead.
TheOtherHobbes 12y ago
In fact Krugman, with his vile Keynesian bias, has been one of the few economists to make the correct calls in the Euro-debacle. His record on other topics is significantly better than that of most 'economic experts.' And he has at least one more econo-Nobel than (I'm guessing) you do. He's been saying for a long time now that austerity is self-defeating. And he is, by any sane evidence-based standard, utterly right. So your ad hominems are entirely off-point. Meanwhile the neo-liberal school has made any number of claims that are often repeated even after they've been falsified by fact. Laffer Curve? Boom. Dead. Utter rubbish. Totally falsified. http://www.brookings.edu/~/media/Projects/BPEA/Fall%201999/1999b_bpea_goolsbee.PDF http://www.brookings.edu/~/media/Projects/BPEA/Fall%201999/1... Trickle down? Self-serving nonsense. No evidence for it at all. http://www.businessinsider.com/study-tax-cuts-dont-lead-to-growth-2012-9?IR=T http://www.businessinsider.com/study-tax-cuts-dont-lead-to-g... Don't tax corporations so they can create jobs? Boom. Dead. Corporations mostly just give the money to executives and hoard the rest. See above, among others. Don't allow governments to spend tax money on infrastructure, innovation, and public education? Excellent! You've strangled the research that led to the beginnings of the Internet, and one or two other important projects too. And so on. The truth here is that facts are not on your side. Name-calling is a poor substitute for being evidence-based, intelligent, and scientifically informed.
- jhulla 12y ago
  Krugman did not foresee the 2008-2009 financial crisis. If anything, bubble economics is his forte. See here: http://www.businessinsider.com/krugman-in-02-greenspan-needs-to-create-a-housing-bubble-2009-6 http://www.businessinsider.com/krugman-in-02-greenspan-needs...
- shit_parade 12y ago
  Thanks for the argument from authority, it is really adding to this discussion.
- crazy1van 12y ago
  > Laffer Curve? Boom. Dead. Utter rubbish. Totally falsified. It may not be perfect, but to say utter rubbish is ridiculous. At its core, the Laffer Curve claims tax revenue is elastic with respect to tax rates. In other words, the revenue derived from taxes is not always proportionate to the tax rate. The classic curve shows 0 revenue at a 0% tax rate -- obviously true since 0% times any number is 0 -- and 0 revenue at 100% tax rate -- because why would anyone work if 100% of it would be taken in taxes. Therefore, there exists a tax rate that provides the maximum amount of revenue between 0% and 100%. The exact shape of the curve is wildly debated and some claim revenue doesn't truly drop to 0 at a 100% tax rate, but those don't change the point that it is possible to lower tax rates and receive more tax revenue.
- derriz 12y ago
  Erm no. He did not "call" the Euro crisis. I notice he has stopped mentioning Ireland, for example, because it now represents a counter-example to his world view. After a few years of austerity, growth has returned, unemployment is falling and tax revenues are rising in Ireland. All apparently impossible according to Krugman and in fact he explicitly predicted the opposite outcome would result from government policy. He irritates me highly because he is clearly smart but hasn't the tiniest crumb of intellectual honesty - he simply ignores inconvenient facts where other commentators and ecomomists (of various ideological bents) engage with difficult facts in order to explore and refine their own belief systems. I have gone from being a Krugman admirer to considering the guy a lying charleton in the space of 5 years.
- 12y ago
hnnewguy 12y ago
>Why don't we just collectively forget/forgive our debts, then? I know, right? I mean, why don't I just throw these BofA bonds I own, paying 6.5% annually, into the trash because I don't like money. In the meantime, why doesn't Ford just give me the car I financed? >Folks, if you think this astrologist/alchemist Krugman is doing scientific work in Economics, please stop and think Don't project your financial ignorance on other people, just because you don't understand how a balance sheet works. Someone's debt is another's asset; someone's income is another's expense. His politics aside, Krugman is right in pointing out a fallacy that I see over and over again in the mainstream. That is, looking at only one side of the sheet. For example, the US households have so much debt! Well, guess how much value they have in assets?
- msandford 12y ago
  > For example, the US households have so much debt! Well, guess how much value they have in assets? After the housing bubble collapse? Many of them have fewer assets than debt leading to bankruptcy. Assets aren't required to go up along with debt as a law of nature. Some people do a good job of buying undervalued things, other don't.
- innguest 12y ago
  Value is in the eye of the beholder (or potential buyer). I see you cut my quote halfway so you didn't have to present a case that mainstream economics is scientific, which I'm yet to see. Please show some yet-unfalsified falsifiable statements in mainstream Economics so that it can be shown that it is scientific and true. Don't give me a run around with lots of words and no proof.

Thus the problem with economics, statistics can be moved to support any side. Correct calls in the Euro-debacle, what calls? Appeals to an authority that selected an individual who did nothing more than present a slideshow or be elected President of the United States are not empirical examples from which to denigrate others. Also, Mr. Krugman has an economic text-book when he was a professor showing the downsides of minimum wage in an economic system, but later on, when writing for the New York Times disregards a number of his propositions. His articles in the New Yorks times are reviewed and inflated for incendiary material by his wife. "...austerity is self-defeating, sane evidence-based standard..." Assuming you are referring to Greece, the country is over leveraged in debt obligations, it readily admits they only have a few weeks of cash on hand (granted this may be a negotiating tactic), any move to try and reign in any of the million programs within the country was defeated. There was no austerity, just an appearance of austerity. Assuming you are referring to the U.S. of A., the country's austerity measures are being seen as effecting economic recovery in a positive manner. Your pointing to the Brookings Institute's report from Austen Goolsbee, he is a gun-for-hire economist to match whatever political whim that is needed. He served within the current administration and along with Christina Romer, sold their economic literacy souls to pass the stimulus. Which, you can point to as having worked, pushing unemployment down, but do not; real full-time unemployment has cratered. Your Business Insider article admits that there is no correlation between trickle down, but also no demonstrable correlation with tax increases; all things being equal, policy should be for the populace to keep their monies. "Corporations mostly just give the money to executives and hoard the rest." Corporations do not hoard money unless there are financial incentives, corporate tax rates on bring money back to America means that many companies are investing abroad or simply placing it in off-shore accounts. If there is an activist shareholder on the board, they will lobby significantly to get a dividend, as Apple has done, or move to break up the company into profitable and unprofitable sections, as HP and its printing division keeps trying to get lopped off. The executives go out and try to make more money by investing it into return projects, look at Silicon Valley, the rich there take their earnings, set up an angel fund and then fund the next big thing. An economy does not end when the executive takes their money home. "Don't allow governments to spend tax money on infrastructure, innovation, and public education? Excellent! You've strangled the research that led to the beginnings of the Internet..." The Internet sprang up from a DARPA intiative through the Department of Defense to mitigate issues from a nuclear fall out through distributive services (http://www.internetsociety.org/internet/what-internet/history-internet/brief-history-internet http://www.internetsociety.org/internet/what-internet/histor...). The take-off of the internet that we know today occurred through private investments. Innovation within in the government is minimal to non-existent, the government engages in rent-seeking habits that create projects that appear to innovate, but simply funnel taxes from the government to well connected "innovators" who fail quickly. Public education should not be included in this as that is a state matter, not a federal policy matter; but public education could be accomplished better for students from a private side approach. Change could actually occur and administrators would be able to adjust curriculum faster.

innguest 12y ago

If you asked me for proof that Evolution is scientific (and true) I'd point you to some (yet-unfalsified) falsifiable statements in Evolution: http://en.wikipedia.org/wiki/Objections_to_evolution#Unfalsifiability http://en.wikipedia.org/wiki/Objections_to_evolution#Unfalsi... Please point me to some (yet-unfalsified) falsifiable statements in Mainstream Economics. Thank you.