Keynesian economics is better than Austrian economics for the US economy

My arguments this round are going to be rather short. I will give a more in-depth definition of Austrian economics, and then go on to explain why the Austrian model of the business cycle is superior. I will have much more to say in the next round when I argue against Keynesian economics. Definitions"The Austrian school is set apart by its belief that the workings of the broad economy are the sum of smaller individual decisions and actions. .. " In other words, it doesn't concentrate on aggregates like most other economics theories (including Keynesianism) do. Austrian economics is a more microeconomical system, concentrating on the individual economic interactions instead of large governmental interactions. [1]The Austrian model of the business cycle can be presented as follows: "In contrast to Keynesianism, the Austrian School of thought holds that the business cycle is driven by the supply side if the economy, not demand. If interest rates are too low, we will have over-investment. This may lead to over-production, which may trigger a crisis. During the crisis, supply declines until it is once again equal to overall demand. Then a new cycle starts. " In other words, instead of concentrating on the cycle of booms-and-busts and GDP, Austrian economics focuses on interest rates in explaining such, and preventing them in the future. [2]Praxeology"Praxeology is the deductive study of human action based on the fact that humans engage in purposeful behavior, as opposed to reflexive behavior like sneezing and inanimate behavior. " Austrian economics is based on praxeology, as opposed to Keynesian economics. It essentially argues that economic interactions can't be simplified into a mathematical model. [6]Jean-Baptiste Say had this to say about it: ". .. have not been able to enunciate these questions into analytical language, without divesting them of their natural complication, by means of simplifications, and arbitrary suppressions, of which the consequences, not properly estimated, always essentially change the condition of the problem, and pervert all its results. " Indeed, as John Wild said, "It is impossible to reduce experience to a set of isolated impressions and atomic units. Relational structure is also given with equal evidence and certainty. The immediate data are full of determinate structure, which is easily abstracted by the mind and grasped as universal essences or possibilities. "[7]Further, praxeology conforms to Popper's social science theories well. "The second way that Popper supported the Austrians was in his advocacy of situational analysis and the rationality principle for the explanation of events in the social sciences. This is practically identical to the Austrian approach, by way of praxeology, the logic of human action, with the basic principle that human beings act purposefully. Popper followed the Austrians in other ways, in methodological individualism, in the theory that most institutions arise as the unintended consequences of actions, in the uncertainty of knowledge. "[8]In other words, economics can't be abstracted into a simple deterministic model. Keynesian economics relies on studies and data to draw it's conclusions. However, this isn't how the study of economics should be conducted. Because of it's very nature, it needs to be more individualistic and less mathematical for the analyzing to make any sense. RecessionsThe whole point behind Keynesian economics is to stimulate booms. Unfortunately, these tend to end up as busts. The government starts by lowering interest rates, which encourages lending. Because the Federal Reserve determines where this new money goes, it generally puts it in a market that it wants to see boom (housing, for example). This market experiences and obvious boom, due to the overabundance of money. Meanwhile, other industries suffer because of this boom. This leads to a declining economy, as the once-peddled increasing economy was based on the lie that the economic really was expanding. Friedrich Hayek said, "To combat the depression by a forced credit expansion is an attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production. " In addition, "The only wise policy for government is to leave money and the banking system to the competitive forces of a free market to eliminate the inflationary booms and recessionary busts of the business cycle, so markets can effectively keep people’s saving and investing decisions in balance for well-coordinated economic stability and growth. "[3][4]At its heart, a recession results from a loss in total capital. Since capital is the accumulated wealth that is owned by business enterprises or individuals and that is used for the purpose of earning profit or interest, a decrease in capital means a decrease in economic activity, which is the very definition of a recession. Accumulating capital itself is known as saving, which is essentially spending not used for personal consumption. Saving is essential for the production of consumer goods, and with it, everything that goes on before retailing a product. With that, ". .. economic recovery requires that the economic system rebuild its stock of capital and that to be able to do so, it needs to engage in greater saving relative to consumption. This is what will help to restore the supply of credit and thus help put an end to financial failures based on a lack of credit. Recovery also requires the freedom of wage rates and prices to fall, so that the presently reduced supply of capital and credit becomes capable of supporting a larger volume of employment and production. Recovery will be achieved by the combination of more saving, capital, and credit along with lower wage rates, costs, and prices. In addition, recovery requires the rapid liquidation of unsound investments. "[5]Sources[1]: . http://www.investopedia.com...[2]: . http://lexicon.ft.com...[3]: . http://www.capitalideasonline.com...[4]: . http://mises.ca...[5]: . http://mises.org...[6]: . http://en.wikipedia.org...[7]: . http://mises.org...[8]: . http://www.the-rathouse.com...