Conservatives have no ideas what to do about recessions

POSTED BY: kpo
UPDATED: Monday, March 9, 2026 17:30
VIEWED: 29022
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GEEZER

Sunday, January 5, 2014 10:30 PM

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Originally posted by m52nickerson:
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Originally posted by Geezer:
The last time the national debt went down was 1957. I think there were periods since then when the economy was doing well. So apparently the debt doesn't get paid down.

That is because the government does not reduce spending during those times. That was explained to you before as well.

And it's the flaw in your reasoning. Once governments get the spending habit, it's darn near impossible to break. The last time spending went down (other than immediately after a war) was in the late 1920s.

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Originally posted by Geezer:So you're saying that the government should have raised taxes at a time when government spending was going down, just so people would not have enough money to pay off their loans?

Maybe you and SignyM should discuss whether the flow of money is a good or bad thing.

Yes that is what I'm saying. During good economic times the government should reduce spending and raise taxes which take money out of the economy, or slows the flow of money. That will slow economic growth which helps prevent massive bubbles, sharply falling interest rates and other such things that can lead to recessions.

But as we've seen, once governments start spending, reducing that spending just doesn't happen.

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Keynesian economics is about using government spending as a counter weight to the economy. Government spending should go up when the economy enters a recession and it should go down when the economy is in a boom. Taxes should be lowered in a recession and rise in an boom.

This is not hard.

Yes money flowing is a good thing. To much flow can be bad as can to little.

Once again, perhaps you and SignyM should discuss this.

"When your heart breaks, you choose what to fill the cracks with. Love or hate. But hate won't ever heal. Only love can do that."

GEEZER

Sunday, January 5, 2014 10:50 PM

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Originally posted by kpo:
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You're forgetting GDP again. Debt was steady as a proportion of GDP.

Nope.

I'm sorry my friend, but that is indisputable fact. Do I have to show the debt/GDP graph again?

Actually it was debt/GNP, and, as noted, it went from 18% in 1929 to 45% in 1939. Sure there's a big spike in the early 1940s that makes the 29-39 range look flatter, but that was WWII.

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As noted, the only success story you can show for Keynes is WWII.

I sometimes forget how insulated American conservatives are from reality. Here's the CBO's verdict on Obama's ARRA stimulus:

"CBO estimates that ARRA’s policies had the following effects in the second quarter of calendar year 2011 compared with what would have occurred otherwise:

* They raised real (inflation-adjusted) gross domestic product by between 0.8 percent and 2.5 percent,
* Lowered the unemployment rate by between 0.5 percentage points and 1.6 percentage points,
* Increased the number of people employed by between 1.0 million and 2.9 million, and
* Increased the number of full-time-equivalent (FTE) jobs by 1.4 million to 4.0 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers)."

http://www.cbo.gov/publication/42216

Yeah. CBO. Saying that their plan worked. Got an independent analysis by an unbiased source?

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Another recent case, Japan's 2013 stimulus spending, which an IMF director commented on in October:

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As we have stressed in this year’s Article IV Report, we at the IMF believe that the new policy framework provides a unique opportunity for Japan to end decades-long deflation and sluggish growth, and reverse the rise of public debt.

Japan has already made progress in this direction. Here, I would like to list a few achievements:

The economy grew strongly in the first half of this year, driven by sizeable stimulus spending, robust private consumption and a rise in exports.

Headline inflation rose substantially in recent months, and several indicators also point to an in increase in long-term inflation expectations.

http://www.imf.org/external/np/speeches/2013/102913.htm

Yep. IMF saying their plan worked. Any unbiased sources?

"When your heart breaks, you choose what to fill the cracks with. Love or hate. But hate won't ever heal. Only love can do that."

6IXSTRINGJACK

Sunday, January 5, 2014 11:15 PM

I never got a college degree, but two of my most enjoyable and fascinating subjects I studied outside of ANYTHING computers were Micro and Macro Economics.

All I can speak for is my own reactions to all of the asshole-ery around me.

1. When I don't need it, I don't buy it. This was just as much true when I made 55k a year as it is now when I make 11k a year. (Not bragging, but THIS is the ONLY reason a guy like me owns a house "free and clear", which in itself is a misnomer and an entirely different post altogether).

2. If it's not broke, don't fix it. Ditto.

3. If it is broke, have faith in yourself that you can do the job just as competently as a "professional". The caveat here is to also know your limits. You're not doing anybody any good if your local taxpayers have to pay for a cleanup crew to mop up your remains if you blow your house up while working on your furnace.

4. Just because you have good insurance doesn't mean you have to waste your doctor's time every single time your kid has a sneeze.

U.S. Government waste is largely just an extension of our own shortcomings. We've become almost ENTIRELY dependent on other people to do everything for us short of wiping our own asses.

No wonder people bitch about things here in these forums instead of holding our elected officials responsible for their idiocy.

I say, when it comes to the destruction of America, it's high time the "good guys" actually stand up and deliver.

Stop being a nation of overfed and undereducated cunts.

Honestly, it's just a word people. GTFU. No gender insults meant here. Most "men" I know these days look less like men in the 60s than the women of the 60's did.

That's right....

My 86 year old grandmother is more of a man than most of this lot....

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Originally posted by kpo:
Very good article:

http://www.businessinsider.com/conservatives-have-no-idea-what-to-do-a
bout-recessions-2013-12#ixzz2ngv5fJ4P

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To be clear, conservatives absolutely do have an economic policy agenda. They favor lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery. They favor these policies now, they favored them in 2008, and they favored them in 2004.

That is, conservatives favor the same set of economic policies when the economy is weak and when it is strong; when unemployment is high and when it is low; when few homeowners are facing foreclosure and when many are. The implication is that conservatives believe there is nothing in particular the government should do about economic cycles.

Well conservatives, is it true?

SIGNYM

Sunday, January 5, 2014 11:58 PM

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Keynesian spending might have started to reverse the Great Depression, after four to seven years, depending on if you consider Hoover's approach Keynesian (I do), but that reversal wasn't sustainable, because FDR couldn't sell the country on continued spending. Then again, Hayak and Rothbard believe that FDR's interventionist policy actually lengthened the depression by keeping the market from making necessary corrections.

"The country" was sold, it was Congress that wasn't. AFA "necessary corrections"... enlighten us: What WERE those corrections that were supposed to happen?

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Yet they don't elect representatives who will increase taxes on the wealthy - or much of anybody - to the extent needed to support the spending you think Keynesian recovery requires.

Our government has consistently represented the will of the wealthy few over the non-wealthy many. Consider it a flaw in the practice of democracy, that politics is so often dominated by money.

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But it's not all rich folks doing the speculation. Unions, pension funds, aggregations of individuals, etc.

Unions and pension funds don't generally invest in hedge funds and speculation because they're too risky. And the point is that there is a lot of money NOT being "invested", and therefore not being recycled into production and consumption. You failed to address that point, which is a major one.

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Then you have an issue of pretty much forcing folks to pay higher prices for domestic goods, but for several years don't have the domestic goods on the shelves yet. So how does money get spent to stay in circulation?

How does it not? Your question makes no sense, please rephrase.

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But Africa's resources can be obtained more cheaply than the same things here in the U.S. The kleptocracies there, often in cahoots with the Chinese, don't care about renewable resources, or environmental or worker safety. If the Chinese can get the raw materials cheaply from Africa and manufacture cheaply in China, they can undercut the U.S. on the world market - especially if we're dealing with governments of countries already stung by our tariffs.

So what? Why do we need to "compete" in the world market on every single commodity and product, if all we wind up doing is wrecking our environment and our economy?

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Take your mind off Mises or Keynes... signy

Guten tag, Herr Marx. - Geezer

Hmmm... Take your mind off Mises or Keynes or Marx or Hayek or Bernanke. Think about economies and how they work without resorting to (inaccurate) name-calling, if you can. Address the point, if at all possible.

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But the problem isn't the stuff, it's having the folks who are willing to take on the jobs we now send overseas - heavy manufacturing, component assembly, piecework sewing, and many more - have those jobs done in an environmentally responsible, labor-friendly manner, and still keep prices reasonably low.

It costs $50 or less to manufacture an iPhone, which sells for $500. I think we can manage to raise wages and still keep prices reasonably low. The only part of this equation which will take a hit is that companies will not take MAXIMUM profit. Again- so what?

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Could you specify against what foreign industries you would apply your selective tariffs? Autos? Clothes? Electronics? Rum?

This would require a committee to study our major imports, and which ones we can most quickly convert to USA manufacture. Off the top of my head, since assembly is probably easier to start up than manufacture, one option would be to start at the end of a product and work our way backwards towards raw materials. Another option would be to start with sectors that are the most strategic- electronics, solar cells, and power transmission (which is very loss-y) for example. Like I said, this would require a lot mor

KPO

Monday, January 6, 2014 1:35 AM

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Actually it was debt/GNP, and, as noted, it went from 18% in 1929 to 45% in 1939.

Ok, let's post the graph again.

Do you or don't you see a flat line from about the middle of 1933 onwards?

Now let's quote what I said when I initially posted the graph:

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This can all be seen from this graph, which shows that US debt was flat for most of the Great Depression

I should've said 'debt burden' instead of debt, but apart from that what I said is unquestionably correct. As for your quoting figures from 1929; I never said the debt burden was flat for the whole of the GD. But a couple of points about that early period:

1. Roosevelt was not in power until 1933 - when the debt burden stabilised
2. Debt automatically goes up in the early part of a recession/depression, because revenues crater.

What it comes down to is you have no case for there having been wild, unrestrained spending throughout the Great Depression. That didn't come until WWII, and when it did come the economy recovered.

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Yeah. CBO. Saying that their plan worked. Got an independent analysis by an unbiased source?

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Yep. IMF saying their plan worked. Any unbiased sources?

You're going into full-blown conspiracy mode here, aren't you? The non-partisan CBO crafted Obama's stimulus package? The IMF crafted Japanese economic policy? Got any cites to back this up?

Got any answer to the mountain of evidence of governments cutting back on spending during downturns, and hurting growth?

More on the ARRA - a survey of economists' views: http://www.igmchicago.org/igm-economic-experts-panel/poll-results?Surv
eyID=SV_cw5O9LNJL1oz4Xi

It's not personal. It's just war.

1KIKI

Monday, January 6, 2014 2:51 AM

bump-tee-dee-bump for geezer

I'm curious if he has any relevant, accurate responses

MAGONSDAUGHTER

Monday, January 6, 2014 3:21 AM

I'm not.

No answer on what to do about recessions, just lots of attack on Keynesian economics.

1KIKI

Monday, January 6, 2014 3:26 AM

Well, ahem, you got me there.

That is geezer's metier.

M52NICKERSON

Monday, January 6, 2014 3:55 AM

Quote:
Originally posted by Geezer:
And it's the flaw in your reasoning. Once governments get the spending habit, it's darn near impossible to break. The last time spending went down (other than immediately after a war) was in the late 1920s.

It's a flaw in the way government is run, not my reasoning.

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Originally posted by Geezer:Once again, perhaps you and SignyM should discuss this.

Nothing to discuss.

I do not fear God, I fear the ignorance of man.

6IXSTRINGJACK

Monday, January 6, 2014 4:18 AM

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Originally posted by Magonsdaughter:
I'm not.

No answer on what to do about recessions, just lots of attack on Keynesian economics.

And liberal use of the "C" word....

Admit it MD.... I made a lot of sense, but there is NO WAY a woman would degrade herself to reply to my post because I used that word......

Sigh...

*shakes head*

Government Mind Control.....

I tip my hat to you, Master......... choke... tear......

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