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Which policy?

Keynes proposed many things in his life, and many more things have been proposed as "Keynesian" since.

post keynesians > new keynesians > new classics

This.

Fiscal stimulus of the economy is good. Deficits don't really matter, governments should use deficit spending appropriately in bad economic times to stimulate the economy. Trump's programs however are a scam to benefit the rich and won't help the economy, while Hillary had a big infrastructure spending plan that would stimulate the economy and grow it.

Freedom Policy, though its critics have good points to make as well.

A useful critic of classical economics, and certainly the "correct" policies for state-capitalist* economic systems.

* Not state-capitalist in the usual sense of the State playing a commanding role in the economy, but rather in that the state and capitalism exist regardless of the specific legal influence on one another.

Horrible policy. Cut spending when there is a deficit.

Wow. Much intelligence. So thoughtful. Gr8 insight.

How the fyck would that do anything for the economy?

Economically sound, but politically horrible because politicians have proved time and time again that they are generally unwilling to set aside the surpluses during the years of good economic times so as to have funds to use during the years of economic famine.  The patriarch Jospeh could be seen as a proto-Keynesian economist, but he's about as mythical as politicians who would actually follow the full set of Keynesian economics.

It was great as long as it lasted, but going back to them won't magically bring us back to the pre-1973 era of shared prosperity. It's time the left comes up with something new.

Worst thing ever

Every country is the world is Keynesian to some degree. Every major economist in the world today believes in the Keynesian economics. If you don't chance it you don't understand economics.The main bone of contention in stages of crisis & whether to accumulate debt.

If you read economics, you will understand without fiscal intervention & Keynesian economics, (say in Laissez faire) both the supply & demand curves move leftwards to adjust to a new equilibrium which will be at Q* instead of Q on the X-Axis.

And Q* << Q, meaning lower GDP, lower wages, loss of jobs, lower taxes which will again increase debt.

Freedom policy and of critical importance during deep recessions.  But I think it gets misused to justify expansionary policies when unemployment is already low.

No supply curve shifts leftwards. If supply curve shift rightwards then Q stays the same (GDP quantity similar) & price (P) falls.

Let us say say Demand has fallen 3D to 2D (example). Unemployment in 25% odd at Wages X. When wage falls to X/2 (say), less people in the labor force will be ready work the job at reduced prices. For example - When the wage of a factory is 100$ a month (say) & it is cut to 50$, the number of workers available for the job @ 50 would always be lesser than those available @ 100$.

That is why the supply curve is generally drawn as a straight line with 45 degree to the X axis. As price/wage increases, supply increases, as price/falls decreases, supply decreases.

Ofcourse this is considering the fact that workers will be willing to take a wage cut. In real life, what we see are "sticky wages" & it is difficult to cut wages by say 20% if demand falls by 20% due to union, unwillingness to take wage cuts, employment contracts, legal provisions etc.

That is true. But employment is only 1 factor, overall economic growth is also critical. In terms of recession or low growth, expansionary monetary policy is followed. I also think it is mis-managed as in governments are not cutting debts the way it should even after a decade (& people have to look @ possibly increasing taxes, reducing wasteful military expenditure to reduce debt if you can't cut entitlements).

I also think Expansionary monetary policy should be done considering the state of Infrastructure. China has massive infra but not the people to consume & it is useless (many infra are being without thought & is useless). But if you look @ the condition of the infra in the US, it is pretty average @ best, so countries with poor infra IMO must look at fiscal infra spending as the potential to build long term assets, improve business climate, quality of life is also significant.

I understand the GOP haggling about entitlement reform (I don't support it) but I understand the logic but I see no reason for them to oppose Infra spending. It will pay off much more when compared to the spend given the quality of infra today.

I agree with this, and I think it also needs to be enforced only on the basis of unemployment+state of economy, while being used alongside other theories.

I am a minimalist Keynesian, in short.

I'm quite a follower of Keynes Quotism:

https://www.brainyquote.com/quotes/authors/j/john_maynard_keynes.html


...and some other good ones not listed here, that one especially, which kinda echoes the preceding one in a still more pleasant way:

I am a New Keynesian, my ideas are a synthesis between Monetarism and Old School Keynesianism, with an aversion to austerity during recessions.

Feudalism and Stalinist state capitalism are much worse.

We are (still) all Keynesians now. Even monetarism is just a flavor of Keynesianism. Its one acceptable capitalist alternative, goldbuggery, is profoundly stupid.

Why don't you like the gold standard?

Because it's the kind of policy that appeals to downscale libertarian (Paulbot) types, but would absolutely decimate business interests, and consequently the economy, if actually enacted.

What is good for business is almost by definition the only good. And gold isn't.

You're an advocate of the military-industrial complex and the Fed's destruction of the common person's means of savings, then?

I'm an advocate of capitalism, which the re-introduction of the gold standard would destroy in short order.

Do you accept the status quo?
If not how would you improve it?
If yes, why do you accept the status quo? Do you have a person in Washington or the state house now? That's what it's coming to. 'We need to get in the game' is what they are saying or else.

I'm not a retard who postures as anti-establishment when I'm not. Being a gold standard Paulbot doesn't make you a rebel.

The idea in itself is sound, but generally works horribly as most governments only follow Keynesian partially not fully.  Otherwise they run deficits during a recession, but continue to run them during growth.  Keynesian says you spend more during recessions to stimulate the economy, but cut back during growth however governments very rarely do the latter thus why it often hasn't worked well.  If they followed it fully instead of partially it would work well.

Agreed

Why do you think it is sound?

Governments are made up of people too which are irrational actors. Why give them the keys to the economy when they do not have perfect information? Why not let individuals and companies decide in the marketplace? On the scale of an entire country of the size of the US with 320 million people it is hard to ask for someone to really know what is the right mix of spending in the market at any time in the business cycle.

The Fed's own admittance of failing to understand why inflation is the way it is and the yet they still have a reading of the economy and decide to raise rates or hold. It paints the picture of the dangers of the lack of information in the monetary field as well as the trust in technocrats to plan the economy. It is a similar one in the fiscal policy field and government dollars during the recession are coming either from the Treasury - tax collection or from the printing press.

It is telling that Keynes himself even after bank run warning signs were going off that he saw nothing wrong and failed to see the looming Depression.

Likewise, many neo-Keynesians such as Paul Krugman were in the dark on 2008 and then later spun info like the Obama stimulus where it was a case where the economy further worsened to say 'well it would have been even worse without it.' Or for 2013 during the timing of the sequester by the Republicans was the talk of the day he mentioned about not wanting to be like Europe with their experience with austerity cuts but when the economy did not sink as he predicted he turned around and credited it to Obama's stewardship of the economy.

Economics isn't about some fantasy perfect alternative that libertarians/Austrian School types present, economics is about choosing among a limited selection of imperfect alternatives. Keynesianism/fiat money 'backed' by central banks has its imperfections, but the alternative you support is a joke.

If anybody wants me to put some meat onto this bone (not that anybody has asked), as I like to point out, for anybody interested in macro-economics (which I'm actually largely not all that interested in, but I can go with it to a point) www.measuringworth.com is a great site.

1.For what it's worth, a central bank whose sole purpose is fighting inflation is actually following Monetarism and not Keynesian, but be that as it is (The Fed has a so-called duel mandate, but the actual people on the Fed have chosen to define that the best way to bring about 'full employment' is through low and stable inflation, which is also the other part of the mandate.  I don't know if they've ever stated that explicitly.)  

If you check, inflation for instance, https://www.measuringworth.com/inflation/,  you'll see that despite whatever questions the Federal Reserve may have in understanding inflation they've actually done a pretty solid job of keeping yearly inflation rates within a narrow range, from 2000-2016, for instance, the inflation rate ranged from -0.36% (2009) to 3.84% (2008).  For 10 of the 17 years,  the annual inflation rate was between the 1-3% range the Fed desires.

Taking a look at a random sampling of years while the U.S was on the Gold Standard, I choose at random 1890-1906 (random other than deliberately excluding the 'Panic' of 1907).  Inflation ranged from -4.36% in 1894 (after the 1893 'Panic') to 2.28% in 1903.   6 of those 17 years have inflation rates of between 1-3% but five years are listed as having an inflation rate of 0.00% which I find a little hard to believe.  So, not too bad, but if you accept that there are sound reasons to have a little inflation, the Fed clearly has done a better job than the Gold Standard.

2.If you check the numbers before the U.S had a national currency, the inflation rate frequently swings wildly from year to year.

3.In regards to actual Keynesian economics, the idea of priming the pump (although lets not forget that term didn't exist prior to Donald Trump inventing it this year)  may not be perfect and, sure, nobody knows what the 'proper' amount of spending should be, but if the fiscal policy is a bit off from the 'proper' amount, so what?  How bad is the marginal harm?

Contrast that with the Austrian School idea that the government shouldn't get involved because, well it just shouldn't!  and consider the harm from waiting for 'market forces' to self correct so that input and other material prices fall low enough to the point where businesses start hiring again.  (Assuming those businesses are even still in business.)

4.I realize less was understood about economics during the time the U.S was on the Gold Standard (which probably isn't a coincidence) but I would ask you to find me a gold bug prior to the 'Panics' of 1893 or 1907 who predicted those events.

5.Finally, you've misused the term 'plan the economy.'  The Federal Reserve attempts to regulate the economy by regulating the money supply.  'Planning the economy' refers to socialism.

I should find the exact quote and person because it's very impressive and because it was said more than 1,000 years before Adam Smith, but some Chinese philosopher said something like "There are 4 parts to an economy: printing of currency, banking, production and trade/commerce. By judiciously controlling the printing of currency the government can successfully regulate the other three."

I see the state as a very poor and inefficient benefactor. It's pretty easy to see this on a daily basis.

Your ad hom on Austrian economics is beside the point...
 
Keynesianism's models depend on so many aggregates and assumptions in consumption function that is revealed as threadbare when compared to real life

Here's a quote from Murray Rothbard's Spotlight on Keynesianism:

"This failure of the Keynesian model is a direct result of misleading aggregative concepts. Consumption is not just a function of income; it depends, in a complex fashion, on the level of past income, expected future income, the phase of the business cycle, the length of the time period under discussion, on prices of commodities, on capital gains or losses, and on the cash balances of consumers.

....

Thus, aggregative economics is a drastic misrepresentation of reality. The aggregates are merely an arithmetic cloak over the real world, where multitudes of firms and individuals react and interact in a highly complex manner. The alleged "basic determinants" of the Keynesian system are themselves determined by complex interactions within and between these aggregates."

Check yourself before you wreck yourself...

My 'ad hom' was that Austrian School proponents promote their economic view as a 'perfect alternative.'  If you feel that that is an 'ad hom' please tell me the flaws you see in Austrian School economics.

Current users disregard the idea that you cut back when times are good, and also generally disregard the value of saving therefore.

Warren Harding and the early 20s economy says hi.

Kensyism doesn't work but I support it

In other words I'm a leftist

haha f**k that

How is that different than Neo Classical economics?

Keynes died in 1946, so he may not have the end all answers to contemporary economics, but he was more right in his lifetime than anyone has the right to be. And his ideas are certainly better than the Austrian and neoliberal ones that followed.

Except that Austrian ideas were around before (Menger and Bohm von Bawerk in the 19th century) and were gaining strength contemporaneous to Keynes. You may know of the Hayek-Keynes rap battle YouTube video.

It was the smearing of classical liberalism as being the cause of the depression - when it was plainly not - as well as the forces of the left rising in the 1930's that saw the Austrian school fail to win many converts despite predicting the Depression which is something that Keynes whiffed on. Austrians were able to also explain stagflation of the 1970's - something that Keynesian & neoclassical followers had a tough time getting around.

They were never discredited, it just went underground in the pre-war years. Having socialist economic policy-friendly fascists who absolutely hated classical liberalism about as much as they hated Jews did a lot to break up the original movement in Austria. Especially when the leader of the movement, Mises, himself was Jewish. Then alongside but not entirely in lockstep with the rise of the new post-war conservative movement the Austrian school saw a new flowering in the 1960's and early 1970's alongside the Chicago school led by Milton Friedman. 

The Keynesian views, flawed as they are, fit in with the idea of increasing state power so of course your lot will prefer it. The Austrian views fit in with the idea of decreasing state power so they were at odds with both the socialist and nationalist views that predominated in the 1st half of the 20th century.

Thus any tenuous connection to the Austrian school is a guilt by association thus Margaret Thatcher's record despite not following the tenets of classical liberalism is considered a black stain on Austrian economics.

I guess if you want a large corporatist economy working hand in hand with a large bureaucratic government then Keynesianism is perfect even though the model has so many assumptions that put it so far from reality.

It all fits in together quite well with interventionist Wilsonian democracy abroad. Intervention by the government with fiscal policy as per Keynesian economics, intervention by the quasi governmental Federal Reserve in monetary affairs. Both together have a mission to manage the economy (looking at inflation & unemployment). Now we've seen our debt go to 20T and the deficit is a hellish $666B - and a ruinous crisis ten years ago. Yet we're still going to the same well.

It's disheartening.

For those of you who are millennials, did you know Alan Keyes didn't have a degree in economics?