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.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (613924)	5/31/2011 3:20:13 PM
From: bentway	Read Replies (1) \| Respond to of 1576708

The problem with Keynesian economics is that it calls for paying DOWN debt in good times, and no (R) administration has even attempted this. Just the opposite.

To: combjelly who wrote (613924)	5/31/2011 6:16:37 PM
From: TimF	Read Replies (1) \| Respond to of 1576708

Before the stagflation of the 70s it was generally believed that you could get lower unemployment for more than the short term, by accepting higher unemployment. By the time Volker actually severely raised rates, the experience of stagflation had caused a lot of doubt about the Phillips curve as more than a short term phenomenon, but before the stagflation it was widely believe to work over the long term. Which does not mean that many did not think we should raise interest rates to control inflation by the late 70s, but that was after years of stagflation, and also few expected lower unemployment rates than during the stagflation period, just a few years after the rates started to go up. Believing raising rates is a good idea under particular circumstances, doesn't imply not believing in the Phillips curve as something that works over more than the short run. You can (and by the late 70s more people did) believe that the unemployment hit was worth it.