Conservatives have no ideas what to do about recessions

POSTED BY: kpo
UPDATED: Monday, March 9, 2026 17:30
VIEWED: 29022
PAGE 9 of 25

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Originally posted by M52NICKERSON:
Okay, but that has little to do with Keynesian economics. If does not matter how much or how little the government debt is. What matter is how much money the government is puting into the economy as opposted to how much it is talking out.

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I thought one of the cornerstones of Keynes was high government (deficit) spending. More spending was one of the liberal ideas for ending recession stated in the cite from the original post.

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Had government spending been lower, and taxes stayed high the economy of the 20's may not have been as roaring but it might have helped prevent the Great Depression.

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If I used "might" and "may not" like that, people would call me names. I'll just ask for a cite.


"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."

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Originally posted by Geezer:
I thought one of the cornerstones of Keynes was high government (deficit) spending. More spending was one of the liberal ideas for ending recession stated in the cite from the original post.

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Yes, during recessions Keynes call for government spending to go up to keep people employeed. The spending is the important part, the deficit part narually comes along for the ride and is a result of the spending but not part of what helps.

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Originally posted by Geezer:
If I used "might" and "may not" like that, people would call me names. I'll just ask for a cite.

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http://www.thegreatdepressioncauses.com/facts-about-causes-of-the-grea
t-depression.html

http://en.wikipedia.org/wiki/Causes_of_the_Great_Depression

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

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Originally posted by SIGNYM:
No, we're saying that the spending required to re-ignite the economy would need to be the EQUIVALENT OF a war. I even lined out an entire spending program which... amazingly... has not one war in it! Despite the fact that we have REPEATEDLY said... over and over... that war per se is not the answer, why do you keep insisting that is our goal? Please DON'T BRING THIS UP AGAIN, or you will look like even more of a tool than you already do.

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The reason I keep bringing this up is that you are more likely to have a good-sized war than you are to implement the spending programs you propose. Even what KPO considers a pretty lackluster program by FDR during the Great Depression ran into pretty strong opposition, including from his own party. If you propose a solution based on events that are really unlikely to happen, it seems only fair that I should point this out.

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Just because the wealthy have money piled somewhere doesn't mean it's being "invested" in economically productive ventures. Not sure if you know this, but the wealthy are "investing" their money either in already-produced unique items (diamonds, gold, Bitcoins, fine art) or in futures/ hedge funds. This is part of a complex discussion about what happens to "savings", already addressed by Keynes and other economists.

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Anecdotal. Cites?

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In a tit-for-tat trade war, we'd come out ahead.

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Didn't work in Smoot-Hawley. Any reason to expect different now?

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And the price of everything goes up. Not saying this is a bad thing, but its something of which you need to be aware.

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Not if you increase production at the same time. That is the OTHER part of my plan: Increase production (manufacturing specifically).

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But increased production only works if you have increased demand. I can make all the blivits I want, but if the blivit market isn't there, I got a lot of leftover blivits.

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Saw that coming. [Increase taxes on the wealthy, and eliminate corporate tax loopholes.]

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And so...??

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So nothing. Just a comment.

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My point being that 'a raised minimum wage, single-payer health care, higher taxes in the rich, reduced military spending, and so forth' isn't what you and KPO have been selling here. You're selling deficit spending at massive rates, preferably powered by world war.

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Are you being stupid on purpose? The point of raising taxes is to reduce the deficit. And neither of us in interested in world war. That seems to be a GOP thing, or a Geezer fixation. But then, you've never met a war you didn't like. You've ALWAYS managed to defend out little "interventions", haven't you? Must be a Geezer thing.

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Until you can come up with a way of convincing the majority of people to go along with the very expensive program of spending, tariffs, civil service job creation, and taxes you proposed above as the cure for recession/depression, war is the only way you have to reach the massive amounts of spending you seem to think are required to end them. Insulting me does not change 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."

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Originally posted by M52NICKERSON:
Yes, during recessions Keynes call for government spending to go up to keep people employeed. The spending is the important part, the deficit part narually comes along for the ride and is a result of the spending but not part of what helps.

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But you generally do end up with a deficit, which has to be paid off at some point, or uncertainty about the ability of the government to remain solvent arises.

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Originally posted by Geezer:
If I used "might" and "may not" like that, people would call me names. I'll just ask for a cite.

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http://www.thegreatdepressioncauses.com/facts-about-causes-of-the-grea
t-depression.html

http://en.wikipedia.org/wiki/Causes_of_the_Great_Depression

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Not sure I see much in these to support "Had government spending been lower, and taxes stayed high the economy of the 20's may not have been as roaring but it might have helped prevent the Great Depression."

More to the point is the lead of the wiki article.

"The causes of the Great Depression in the early 20th Century are a matter of active debate among economists..."

Seems to be a matter of active debate on RWED as well.



"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."

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GEEZER, before you get all apoplectic about Federal debt, and before everyone gets focused on the government, I want to re-introduce something that every seems to have forgotten.

As far as I can tell, the largest inflator of USD is the investment banks. They have - literally- 10 times as much money in hedge funds as there are assets throughout the entire world. Domestic banks, too, have a license to "print money"- by the rules of the FDIC they are allowed to loan out approximately 10X as much money as they actually have on hand.

Since almost ALL money exists in one bank account or another, and banks are free (under current laws) to loan out far more than they have on-hand, banks have proved to be very capable of expanding the US money supply by a factor of five- or more. All of this non-government money-printing tends to go under the radar.

This excessive speculative lending (on real estate, and then stocks in 1929; and on subprime mortgages in 2000-2007) inflated the money supply, and that inflation completely bypassed government spending controls bc the government wasn't even part of it.

If you want to stop bubbles before they start, you NEED to require that banks have a LOT MORE money on-hand as part of their lending practices, and also that they define their asset classes in something other than fantasmic terms (how do you value your loan or bond portfolio when their prices are gyrating? "Mark to market"? "Mark to maturity"?)

Anyway, will be busy today. Just wanted to point out that the Federal budget is not the main money-supply-expander, it's the banks.

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Originally posted by Geezer:
But you generally do end up with a deficit, which has to be paid off at some point, or uncertainty about the ability of the government to remain solvent arises.

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Deficits would get paid down when the economy is doing well. I covered that already. Please try and follow along. Second you really need to understand that governments using their own issued fiat currency can't go insolvent.

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Originally posted by Geezer:
Not sure I see much in these to support "Had government spending been lower, and taxes stayed high the economy of the 20's may not have been as roaring but it might have helped prevent the Great Depression."

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Okay I will spoon feed you. Look at the Specific theories of cause section. It talks about how lending increased as interest rates fell. They fell because people were paying off thier debts and the banks needed to make loans more appealing. If the economy had not grown as fast as it had in the twenty loans would have stayed more stable as people would not have paid down thier debts and banks would not have looked to lower interest rates.

You also had productivity shock which again stemmed from the economic growth in the twenty. The heavy flow of money in the twenty and the easy of finding investors ment that production skyrocketed. That caused a flood of stock and a fall in prices.

Look at an of the explantions you want and will find that they all have one thing in common, a tie into the rapid growth of the economy of the twenties.

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

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The reason I keep bringing this up is that you are more likely to have a good-sized war than you are to implement the spending programs you propose.

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Well, that is your supposition, but not our proposal. So don't keep saying that KPO and I think that was is the answer. War is YOUR answer.

AFA getting stimulus spending thru, I think a lot of ppl already recognize that much of our infrastructure is well past its safe lifespan, that our health care system is a clusterfuck, that a lot of big jobs need doing. Where they are stymied is not at the level of "the people" (because polls show that people support spending on specific programs) but at the level of "Congress".

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Not sure if you know this, but the wealthy are "investing" their money either in already-produced unique items (diamonds, gold, Bitcoins, fine art) or in futures/ hedge funds. This is part of a complex discussion about what happens to "savings", already addressed by Keynes and other economists. -signy

Anecdotal. Cites? -geezer

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Oh, this is all over the economic news. Chinese wealthy are buying a crapload of gold, wine, art, vehicles, etc. The EU wealthy are buying up gold, art, diamonds, mansions. The mix varies from year to year (one year its art, the next year its Bitcoin) but speculation is definitely the ongoing game:

DEMAND FOR ALL TYPES OF INVESTMENTS OF PASSION GREW IN 2010

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Individual preferences play a large part in HNWIs’ (High Net Worth Individuals) decisions to commit to investments of passion, especially given emotive variables such as aesthetic value and lifestyle/status appeal. But HNWIs also view many investments of passion as alternative vehicles for preserving and appreciating their capital over time, diversifying their portfolio exposure or even capturing short-term speculative gains.
As wealth levels rebounded in 2010, interest in all forms of investments of passion also revived. HNWIs’ relative allocations to those investments changed very little from 2009, but new and growing demand was discernible from emerging markets. The following were among the developments in major categories of investments of passion in 2010:

Luxury Collectibles (e.g., luxury automobiles, boats, jets) remained the largest single segment (29%) of investments of passion. Demand for luxury cars rebounded broadly in 2010, but especially from emerging economies in Asia-Pacific, Russia, and the Middle East. Mercedes-Benz, for example, said its worldwide sales rose 15% in 2010, while sales in China including Hong Kong jumped 112% and sales in other emerging markets including India, Brazil, and Russia also rose sharply. Ferrari reported China sales in 2010 were up nearly 50% from 2009, its best ever year. Ferrari added that the “Greater China Area” (including Hong Kong and Taiwan) is now one of its top five international markets.

Art accounted for 22% of investments of passion overall, but that share was higher among European HNWIs (27%) and highest among Latin American HNWIs (28%). Art is also most likely to be seen as a form of financial investment. In fact, 42% of Advisors say they believe their HNW clients invest in Art primarily for its potential to gain value. While it is hard to generalize about Art values, auctions in early 2010 certainly
generated headlines when two world records were broken for artworks sold at auction —first a Giacometti painting sold for US$104.3 million in February, then a Picasso sold for US$106.5 million in May. Later auctions were less ebullient, but auction houses report demand remains strong for high-quality pieces. Newly wealthy Chinese buyers are widely reported to be keen bidders and buyers at galleries and auction houses, especially to acquire the fast-diminishing supply of works from native artists. In April 2010, “Bright Road” by Liu Ye, a contemporary Chinese artist, was auctioned for US$2.45 million, almost three times the pre-auction estimate. That sale was part of a Sotheby’s auction of contemp

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