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Politics : Mainstream Politics and Economics -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (7863)1/31/2012 5:31:24 PM
From: sm1th1 Recommendation  Read Replies (1) | Respond to of 85487
 
Keynes said we pay off the debt in good times and borrow in bad times. These people who are always quoting him forget the part about paying of the debt in good times.

That is the critical point that most people miss. No large country has ever been anything but half-Keynesian. If it were honestly tried it might work, but we will never find out. In boom times tax revenue expands, and rather than paying off the debt from the previous cycle, they expand government even more. What was the mantra of the 90's? "It's different this time". Politicians believed (or at least wanted to believe) that the cyclical economy was gone and it would be happy times forever.



To: Little Joe who wrote (7863)1/31/2012 5:52:51 PM
From: grusum  Read Replies (1) | Respond to of 85487
 
Keynes said we pay off the debt in good times and borrow in bad times.

it's impossible. it has never been done and never will be done. keynes shows his fundamental misunderstanding here. one can never know when good or bad times are beginning or ending, even though they are easy to see in historical charts.


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