Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (257860)	6/30/2010 11:34:10 PM
From: Broken_Clock	Respond to of 306849

Take a look at EJ's charts again.... then overlay with the same time period on the 30 year treasury debt rates. Since 1980 the US has goosed the economy with lowered rates coupled with massive printing. if 30 years of manipulation didn't work, it's time to try a different approach.

To: neolib who wrote (257860)	7/1/2010 5:06:59 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 306849

>>Unlike most people who post here, I'm quite certain Keynes was correct in his theory.<< we don't know if keynes was right or not because the greed demons never wanted to apply his theories during the bubbles... raise taxes and run a big surplus in order to cover for the bad times. one way keynes during the busts only is INSANE. the busts keeping getting bigger the more keynes' policies are thrown at the problem. oh, and then there is the issue that keynes would not have supported giving trillions to a few government special interests, primarily bankers. that helps bankers AND HURTS SOCIETY.

To: neolib who wrote (257860)	7/1/2010 5:31:31 AM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

For a moment let's agree that full employment and economic stability is possible through "Keynesian" government intervention in aggregate demand. Proposed Model: The government should boost short-term demand through public spending, and when the economy becomes robust the government reclaims its budget deficit by increasing taxes and reducing public spending. Analysis: It matters little is this is true, as America has not followed this model since 1980. Over the past thirty year time period government has increased it's debt to GDP ratio in a secular manner, almost as quickly as business and consumers have. Since we have not followed the "Keynesian" pattern of counter-cyclical spending and taxing, I would suggest we should have no expectation of the long-term economic stability promised to those who adhere the the "Proposed Model". Laying aside Maynard Keynes's belief that an economy could be best run without economic rents, in a state of perpetual zero interest rates, most who call themselves "Keynesian" today believe the central bank should emulate the "Proposed Model" in monetary policy as the government does with fiscal policy. Just as with fiscal policy, I point out the central bank has reduced interest rates to zero in a secular manner since 1980. The stabilizing effect of short-term microeconomic quivers in interest rates have been lost in a mistaken long-term trend which now waits to roll all avoided recessions during this period into on massive collapse in demand due to misallocated capital. I would suggest Alan Greenspan may have taken to heart far too seriously Paul Krugman's comment, “If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God" Alan Greenspan kept his foot on the gas pedal and we now get to see if our economy can indeed be best run without economic rents, in a state of perpetual zero interest rates - as Keynes one time suggested it might. I instead predict unpleasant results similar to the 1930s. Keynes, if anything, was pragmatic and quick to abandon any theory which was not proving immediately helpful. In fact his "General Theory" paper has an near absence of of mathematic description because Keynes believed economics was too variable to be described with formulas. I believe Keynes would have long ago abandoned Japan's twenty year repetition of alleged "Keynesian" policies which has produced little more than an economic coma and the highest government debt-to-GDP ratio among industrialized nations. As Keynes asked, "When the facts change, I change my mind – what do you do, sir?" This ability to easily discard dysfunctional and non-predictive models appears to be beyond the abilities of current doctrinaire "Keynesian" facsimiles. I see Skeeter Bug has already addressed these flaws of Keynesian implementation in a different style of presentation in the prior post. I think the fact that America has not implemented a Keynesian model since 1980 is clear to anyone. .