tag:blogger.com,1999:blog-8951536271316855305.post141241075904771766..comments2010-09-16T06:04:11.452-07:00Comments on Plain Politics: When Did Deficit Spending Ever Lead to Actual Growth?ADTsiourashttp://www.blogger.com/profile/18058321058878247003noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-8951536271316855305.post-9762792289992009292010-09-16T06:04:11.452-07:002010-09-16T06:04:11.452-07:00Thank you very much for the clarification. By defi...Thank you very much for the clarification. By deficit spending I was referring (perhaps erroneously) only to the government actually spending more money, rather than taxing less. Needless to mention that I agree with your closing sentence.ADTsiourashttps://www.blogger.com/profile/18058321058878247003noreply@blogger.comtag:blogger.com,1999:blog-8951536271316855305.post-85222563008646155072010-09-16T04:55:22.423-07:002010-09-16T04:55:22.423-07:00only slight mistranslation, or misunderstanding: I...only slight mistranslation, or misunderstanding: I am saying government spending should lead to deficits if it is to have an effect on aggregate demand, and hence growth.<br /><br />Now, extra spending need not be in the form of extra hiring for the public sector or private sector subsidies. It can just be higher unemployment benefits or just lower taxes!<br /><br />Reagan (or Thatcher) did not do much against inflation, the Central Banks did. Having a reasonable monetary policy is not incompatible with an anticyclical fiscal policy, as far as I know.S Ghttps://www.blogger.com/profile/15494314043804907813noreply@blogger.comtag:blogger.com,1999:blog-8951536271316855305.post-76102756152671945102010-09-16T00:36:29.096-07:002010-09-16T00:36:29.096-07:00@ S G
I really appreciate your comment (please co...@ S G<br /><br />I really appreciate your comment (please correct me, if I mistranslated it). Of course, the basic Keynesian tenet is for the government to spend (or restrain itself) against the tide. And, correct me if I'm wrong, but I think that can be inferred from your comment, deficit spending, according to its proponents, is only a temporary measure, used to jump-start the economy and then let the virtuous circle initiated by the increased demand lead to continued growth. However, the example typically given as a success story in deficit spending is FDR's Great Depression policies - and I do not find it very convincing. On the other hand, both Reagan and Thatcher combated stagflation (successfully, I dare say) by restraining money supply, either by elevated interest rates or by raising taxes in the midst of a recession. Moreover, I am sure you will recognize all the dangers inherent in government spending - the opportunities for corruption, for example - which should be weighed against the potential benefits of any governmental intervention.ADTsiourashttps://www.blogger.com/profile/18058321058878247003noreply@blogger.comtag:blogger.com,1999:blog-8951536271316855305.post-21334795501840460582010-09-16T00:19:49.556-07:002010-09-16T00:19:49.556-07:00For the benefit of the millions of our readers out...For the benefit of the millions of our readers out there, who don't read Greek, here is a rough translation of S G's comment:<br /><br />Keynes has established, as far back as 80 years ago, that it is plausible that total demand in the economy be not enough, leading to meaningless unemployment and under-utilization of resources. Under circumstances like these, government expenditure (which is bound to lead to deficits!) may lead to the correction towards a better equilibrium. The issue is that, when the economy is doing well, you should do the opposite, i.e. have surpluses, which Greece criminally failed to do.ADTsiourashttps://www.blogger.com/profile/18058321058878247003noreply@blogger.comtag:blogger.com,1999:blog-8951536271316855305.post-75867877250143956312010-09-15T12:13:05.170-07:002010-09-15T12:13:05.170-07:00αθανασιε
η δυνατοτητα η συνολικη ζητηση στην οικ...αθανασιε <br /><br />η δυνατοτητα η συνολικη ζητηση στην οικονομια να μην ειναι αρκετη και να εχουμε ανουσια ανεργια και υποαξιοποιηση πορων ειναι υπαρκτη και την εχει δειξει εδω και καπου 80 χρονια ο Κεϋνς. Σε τετοιες συνθηκες οι κυβερνητικες δαπανες (με ελλειμματα παντα!) μπορουν να φερουν επανορθωση μιας καλυτερης ισορροπιας. Το ζητημα ειναι οταν η οικονομια παει καλα να κανεις το αναποδο, να εχεις δηλαδη πλεονασματα, κατι που η Ελλαδα αμελησε εγκληματικα να κανει.S Ghttps://www.blogger.com/profile/15494314043804907813noreply@blogger.com