It's also worth noting that the United States relied very heavily on tariffs through most of its history going all the way back to the revolutionary war years. It was only post WW2 that we started to move away from this.
It's also worth noting that the United States relied very heavily on tariffs through most of its history going all the way back to the revolutionary war years. It was only post WW2 that we started to move away from this.
It did not actually work out like how he predicted, it's fair to say
I agree, he missed one point. I do not think he took into consideration that such a large number of people could stay home and play while receiving a free check each month from the Govmt. to have a nicer standard of living than many of the people who get off their behinds and go to work each day. Also I do not think he took into consideration that rather than living within their means, many people upgrade their standard of living with credit rather than finding a way to advance their income.
I think it worked out just like he wished it would. "Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate," to me means put everything up for sale, flood the market, drive prices of stock, farms, and real estate down so that he and his wealthy elite compeers could buy cheap and sell high later. (I don't know how one would liquidate labor.)
Are you a fan of Keynesian economics?
Woody
If that were true then why was overall spending and GDP essentially cut in half and why didn't wages increase as a result of people choosing not to work? If employer demand for workers stayed constant in the face of 25% of the labor force just one day choosing instead to not work then why didn't the price of labor (wages) increase?
Liquidate labor means mass layoffs. I assume he meant that many jobs were frivolous and not useful to society, so the economy is better without them. The problem with that logic is that workers have fixed obligations like mortgages and such, so that it is much harder to push wages down and when they are pushed down then it is usually due to mass layoffs and bankruptcy. What good is buying an asset on the cheap if no one has any income to support the return. (This is a Keynesian insight also, by the way.)
So yes the Keynesian school has lots of valuable insights. But I'm talking Keynes the reality and not Keynes the caricature that is commonly referenced these days in a derisive manner. Keynes never actually said the government should always run deficits. Politicians perverted his original quote to justify their pet programs.
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Oh, like, maybe after the next recovery? Or, like, maybe after the next round of inflation? Or business opportunity like when an aspiring entrepreneur needs a building and some machinery to build his widget?
It's not deficits that are the matter, it's the government taking money from Peter and using it to support Paul's road building business for roads to nowhere in an effort to "spark new business," or to bail out some business that is "too big to fail."
Woody
I won't argue with you on bailouts and crony capitalism. It's obviously a problem. I don't understand where you're coming from on Infrastructure though. The US does have unusually high construction costs, but that doesn't mean the whole process of infrastructure development is negated. The interstate highway system, as an example, has clearly made us all better off and wealthier even if a small concentration of contractors got rich in the process. Waste is a problem, but that doesn't mean we should burn the entire system down. You should work to reform it and make it better and less wasteful. If a part on your firearm isn't working properly you don't throw the whole thing in the trash do you? (At least I don't.)
I did not condemn spending money on the upkeep of our infrastructure or of its prudent expansion. I condemned the roads to nowhere. Bridges to nowhere ought to be included as well. Those things do nothing to spur the economy.
Woody
Well I guess it depends really. If real government borrowing costs are negative (like they were for much of the Obama years) and there is high unemployment than bridges to nowhere really do add value. I know this will probably provoke a heated response, but if idiot foreigners like china want to pay the federal government for the privilege of lending us money to invest in our own country than why should we stand in their way?
Bridges and roads to nowhere do not help the economy. If the government has enough money to build such things, it has that money to return to the taxpayers where it will spur economic worthwhile and sustainable growth. If government does not have the money and borrows it instead, government has only increased debt and the burden debt has on the taxpayers.
Since when does China pay us to borrow its money?
Woody
Since when does China pay us to borrow its money?
Woody
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