41–50 of 116 posts
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I think what he's suggesting is that paying down debt through austerity can be more costly than growth, since austerity hurts growth. The trick is, where does growth come from?
The mistake there is thinking printing money brings you growth. Where has this worked?
Because economics has always been utterly useless in any practical sense. It makes no testable predictions and is no more scientific than any theology. Only because it clothes its dogmas in symbolic notation is it accorded even the slightest bit of respect. The sooner we jettison it from our epistenic frames, the more quickly we will return to something that at least partially resembles sanity.
You are correct though. Economists are so proud of their elegant equations that they won't let questions like "Does this model accurately measure reality" stop them.
If economists did come to a broad consensus, many politicians would still ignore that consensus if it didn't happen to fit their worldview or the interests of their major donors. See: climate science.
My Gosh, that is an extremely salient and DEEPLY DEPRESSING point. I've been drawn to question what to do about that quite often, but I havent happened across an acceptable answer as yet.
Earlier quoted context omitted.
The mistake there is thinking printing money brings you growth. Where has this worked?
In all western societies, looking at the great lifestyle differences between the 1970s and now.
Because they don't take debt, in particular private debt, seriously, including Krugman and Delong. Steve Keen explains how wrong this is.
Nobody thinks national debt doesn't matter. They think the long term costs of endemic poverty or economic stagnation outweigh the long term costs of carrying a deficit.
Randy Wray sets the record straight in 100 seconds: https://www.youtube.com/watch?v=c4sD-JDVwwQ
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Why not? Minimising these impacts it's about finances, not economics. I.E Economics is about predicting these things (which they absolutely didn't), finances is about putting mechanisms in place so that if they happen they will be minimised.
Economics is not about predicting, it's about understanding things. It's basically impossible to do the former at scale for time periods over 6 months, we're slowly getting better at the latter. One big reason economic forecasting is so hard is that agents in the system you are forecasting are taking your present period forecast into account when acting in future periods.
If economists did come to a broad consensus, many politicians would still ignore that consensus if it didn't happen to fit their worldview or the interests of their major donors. See: climate science.
My Gosh, that is an extremely salient and DEEPLY DEPRESSING point. I've been drawn to question what to do about that quite often, but I havent happened across an acceptable answer as yet.
Earlier quoted context omitted.
The mistake there is thinking printing money brings you growth. Where has this worked?
Firstly there are two ways that money is printed. 1) Government/central bank spend more than they take in taxes. 2) Private banks make loans to private sector (biz or individuals). Money is destroyed by government running a surplus or by loans being repaid. Note also that for the government to run a surplus the private sector must run a deficit (decrease savings or increase borrowing) in most circumstances. The quest…
Earlier quoted context omitted.
The mistake there is thinking printing money brings you growth. Where has this worked?
Firstly there are two ways that money is printed. 1) Government/central bank spend more than they take in taxes. 2) Private banks make loans to private sector (biz or individuals). Money is destroyed by government running a surplus or by loans being repaid. Note also that for the government to run a surplus the private sector must run a deficit (decrease savings or increase borrowing) in most circumstances. The quest…
Real money inherently has a limited supply, so there is no need for it to be managed or controlled; the market does that on its own. However, the fiat currencies that are used by central banks around the world are not real money. The arrogance of central banks thinking they can manage and control the economic interactions of millions of people in a country is what leads to these great depressions and recessions.