TheNcredibleEgg
08-15-2011, 09:34 PM
Let me preface this by saying the poster in question is extremely talkative and will argue about anything forever. He - you will see - is clearly a big gov't Keynesian. But today he shut down and said "case closed" and stopped talking. Is this the sign his mind his hopelessly closed - or were the arguments finally getting to him - and perhaps just needed time alone?
The OP of the thread: (Written by Jammer)
This is a argument I have had many times with libs on this board(often with the same person). Many of them do not seem to understand the position made by people who want to cut spending. It is not that cutting spending will cause immediate growth. It is that cutting spending will restructure the economy.
If we want to get out of this recession, we need to get rid of malinvestment, liquidate debt, reallocate capital, and rebuild our savings. Cutting spending WILL cost some jobs in the short term. But in the long run they will be put to things that are productive. Many jobs are simply unproductive either do to inept management or lack of need for them.
It is not enough that people are employed. People need to be employed in productive job. If their labor is not creating a good or service that people want, than their labor(and their employers money and capital) is being wasted. things that could be used to create something we want. If a business owner cannot turn a profit and his capital and his employee's labor should go to someone who knows what he/she is doing.
Keynesians like to argue that there is a quick fix to the economy. There isn't. For the past decade we have be living beyond our mean and borrowing to consume. We HAVE to pay for that.
Resident Keynesian replies: (Collins.)
Hmmm.... You do know that all of those arguments were made before, don't you? Let's look back in history when they were made in times resembling what we have right now. That would be the year 1937. We were in a very tepid recovery from a horrible recession. People that we would now call "The Tea Party" made the same arguments you are making now and forced Roosevelt to cut spending. What happened? Were things really great?
In other words, do you see a world war on the horizon to wipe away the mistake you are suggesting making again?
Me:
Do you ever stop to think that the greatest two Keynesian experiences in our history - the 1930s and today - have resulted in the longest lasting downturns?
I mean, really, if the gov't implemented Austrian (free market) economics during the 1930s and today - and the results were the same forever depressions - I would take pause as to my faith in Austrian economics.
How Keynesians can continue to ignore so much empirical evidence against the theory is beyond me?
Collins:
Well, I will point out - the economy was actually starting to improve until the govt was forced to cut spending in 1937. Then the economy slid back into the depression. Historically we have experience showing us that cutting spending in the middle of a tepid recovery is not a good idea.
Me:
But it clearly was not improving since it was not sustainable without the gov't stimulus. The improvement was just a mirage - a bubble - similar to the recent GWB housing bubble.
And if not 1937, when? Whenever the stimulus is finally cut - there will be contraction and pain. A recession will almost always ensue if the recovery was based on artificial stimulus. The idea that the economy will ever be so strong independent of stimulus to withstand the withdraw - is the longest of longshots.
Collins:
Funny thing though - the economy fell back into depression and was only saved by a war... which brought with it massive govt spending.
Me:
But it wasn't the war, per se.
( Haven't we had this conversation before?)
It was the end of the war that saved the economy. And the perfect economic storm of having the rest of the industrial world in ruins (so we could export immense amounts) and the technology gains from the war.
What are the odds of that perfect storm repeating?
Collins:
And by the end of the war, there were companies poised to take advantage of that new environment - that would not have been in that position without the govt spending that had gone on during the war. That is what you forget.
It was the govt that spent the money for the companies to have the infrastructure and money to invest in the chances that they had after the war. That would not have happened if they were starved to death before the end of WWII.
Me:
That they were in position then doesn't matter for current comparison.
If the perfect storm had not existed - all that would have to be written off as malinvestment.
So unless gov't spending/stimulus is followed by another perfect economic storm (like post WWII) then any gov't stimulus/spending is likely to be just misallocated funds - and a waste. Worsening the current downturn.
Collins:
Tell me what would have happened if the US govt had not entered into the war, had not spent any money and the depression had continued. What would have happened would be that the US economy probably would have been still weak in 1945, the chances would have been there - but no company would have been in a position to exploit those chances.
Govt spending helps the economy. There is historical evidence for that simple proposition. To continue to claim otherwise is to simply shut one's eyes to reality in favor of mindless;y spewing simplistic dogma.
Case closed.
In another parallel conversation on the same thread - he replied this to Jammer:
It also ended the depression and left companies healthy enough to exploit the possibilities of the post-war world.
To repeat that is to make the same mistake your partner above made - you are mindlessly repeating simplistic dogma.
Therefore case closed. To simply repeat some catechism you hear from the GOP is to grossly over-simplify how the world works
He then did not respond anymore to the thread - something he never seems to do and he's never used the phrase "case closed" before so it threw me off. Does this seem like a mind hopelessly closed or perhaps his views finally challenged him and he might yet convert?
The OP of the thread: (Written by Jammer)
This is a argument I have had many times with libs on this board(often with the same person). Many of them do not seem to understand the position made by people who want to cut spending. It is not that cutting spending will cause immediate growth. It is that cutting spending will restructure the economy.
If we want to get out of this recession, we need to get rid of malinvestment, liquidate debt, reallocate capital, and rebuild our savings. Cutting spending WILL cost some jobs in the short term. But in the long run they will be put to things that are productive. Many jobs are simply unproductive either do to inept management or lack of need for them.
It is not enough that people are employed. People need to be employed in productive job. If their labor is not creating a good or service that people want, than their labor(and their employers money and capital) is being wasted. things that could be used to create something we want. If a business owner cannot turn a profit and his capital and his employee's labor should go to someone who knows what he/she is doing.
Keynesians like to argue that there is a quick fix to the economy. There isn't. For the past decade we have be living beyond our mean and borrowing to consume. We HAVE to pay for that.
Resident Keynesian replies: (Collins.)
Hmmm.... You do know that all of those arguments were made before, don't you? Let's look back in history when they were made in times resembling what we have right now. That would be the year 1937. We were in a very tepid recovery from a horrible recession. People that we would now call "The Tea Party" made the same arguments you are making now and forced Roosevelt to cut spending. What happened? Were things really great?
In other words, do you see a world war on the horizon to wipe away the mistake you are suggesting making again?
Me:
Do you ever stop to think that the greatest two Keynesian experiences in our history - the 1930s and today - have resulted in the longest lasting downturns?
I mean, really, if the gov't implemented Austrian (free market) economics during the 1930s and today - and the results were the same forever depressions - I would take pause as to my faith in Austrian economics.
How Keynesians can continue to ignore so much empirical evidence against the theory is beyond me?
Collins:
Well, I will point out - the economy was actually starting to improve until the govt was forced to cut spending in 1937. Then the economy slid back into the depression. Historically we have experience showing us that cutting spending in the middle of a tepid recovery is not a good idea.
Me:
But it clearly was not improving since it was not sustainable without the gov't stimulus. The improvement was just a mirage - a bubble - similar to the recent GWB housing bubble.
And if not 1937, when? Whenever the stimulus is finally cut - there will be contraction and pain. A recession will almost always ensue if the recovery was based on artificial stimulus. The idea that the economy will ever be so strong independent of stimulus to withstand the withdraw - is the longest of longshots.
Collins:
Funny thing though - the economy fell back into depression and was only saved by a war... which brought with it massive govt spending.
Me:
But it wasn't the war, per se.
( Haven't we had this conversation before?)
It was the end of the war that saved the economy. And the perfect economic storm of having the rest of the industrial world in ruins (so we could export immense amounts) and the technology gains from the war.
What are the odds of that perfect storm repeating?
Collins:
And by the end of the war, there were companies poised to take advantage of that new environment - that would not have been in that position without the govt spending that had gone on during the war. That is what you forget.
It was the govt that spent the money for the companies to have the infrastructure and money to invest in the chances that they had after the war. That would not have happened if they were starved to death before the end of WWII.
Me:
That they were in position then doesn't matter for current comparison.
If the perfect storm had not existed - all that would have to be written off as malinvestment.
So unless gov't spending/stimulus is followed by another perfect economic storm (like post WWII) then any gov't stimulus/spending is likely to be just misallocated funds - and a waste. Worsening the current downturn.
Collins:
Tell me what would have happened if the US govt had not entered into the war, had not spent any money and the depression had continued. What would have happened would be that the US economy probably would have been still weak in 1945, the chances would have been there - but no company would have been in a position to exploit those chances.
Govt spending helps the economy. There is historical evidence for that simple proposition. To continue to claim otherwise is to simply shut one's eyes to reality in favor of mindless;y spewing simplistic dogma.
Case closed.
In another parallel conversation on the same thread - he replied this to Jammer:
It also ended the depression and left companies healthy enough to exploit the possibilities of the post-war world.
To repeat that is to make the same mistake your partner above made - you are mindlessly repeating simplistic dogma.
Therefore case closed. To simply repeat some catechism you hear from the GOP is to grossly over-simplify how the world works
He then did not respond anymore to the thread - something he never seems to do and he's never used the phrase "case closed" before so it threw me off. Does this seem like a mind hopelessly closed or perhaps his views finally challenged him and he might yet convert?