From: an030@cleveland.Freenet.Edu (Broward Horne)
Newsgroups: alt.president.clinton,talk.politics.misc
Subject: Re: Keynesian thing (was: A "New" Reich)
Date: 11 Nov 1992 15:49:18 GMT
Organization: Case Western Reserve University, Cleveland, OH (USA)
Reply-To: an030@cleveland.Freenet.Edu (Broward Horne)
NNTP-Posting-Host: hela.ins.cwru.edu


In a previous article, randall@informix.com (Randall Rhea) says:

>an030@cleveland.Freenet.Edu (Broward Horne) writes:
>
>
>>      The Keynesian thing really gives me a laugh.  Tell me, if I 
>>      move my wallet from my right pocket to my left pocket, do I 
>>      have more money?
>
>Well, if you believe in Keynes' ideas about the "velocity" of money,
>yes.
>
>Keynesian economics has very little to do with redistribution of
>income, taxing the rich, etc.   For some reason, people seem to think


        I doubt  I misunderstood him.  Government borrows money from
   those who have it and are not spending it, then spend it themselves.
   It's the same thing as redistribution of wealth, just a different 
   name.

>that it does, and they conse
quently misunderstand Keynes.
>
>Keynes sites a few main causes of economic stagnation: aggregate
>demand is too low, and velocity of money is too low.  When the demand
>for goods and services is low, and money is not changing hands
>rapidly, you have a recession.  Unless you increase aggregate
>demand and velocity, you will still have a recession.  One
>way to increase them is to increase public spending, even if it
>means a budget deficit.  However, Keynes did not advocate permanent
>budget deficits; once the recession is over, you balance the budget.
>
>Keynes is right and has always been right.  The economic "booms" of
>the 1960's and 1980's were a result of high government spending
>(primarily on defense), which increased aggregate demand and 
>money velocity.   Although monetary policy is important, it alone
>will not take you out of a recession.   This was Bush's strategy,
>and it failed.  This is the first recession since the 1930's where
>some kind of Keynesian strategy was not used to combat it, and
>consequently, the recession has dragged on.


      Keynes theory allows our government to kid themselves.

      If you really look hard, you'll see that Keynes, Gailbraith,
Batra, Thurow, Marx, Kindleberger and Friedman are all looking at 
 the same function from different aspects.
>
>John Kenneth Galbraith extended Keynes into the areas of
>maldistibution of income.  This is where "tax the rich"
>comes from.  Galbraith sites maldistribution of income (rich
>have all the money and the poor are too poor to be consumers)
>as a major cause of the Great Depression as well as today's
>recession.   Consumers simply do not have the money to
>buy goods now, especially big-ticket items.  Hence Ford and
>GM are showing record losses.
>
>Say what you want about Galbraith and Keynes.  However, Galbraith
>accurately predicted the current economic mess several years
>ago using Keynesian theories.  He called Reagan's (and JFK's) tax
>cuts "reactionary Keynesianism."  He laughed at the Laffer Curve.
>He knew what the budget deficit would do to us.  He knew that
>de-regulating the S&Ls would lead to disaster.   As a student
>of history and economics, he saw too many parallels with the
>1930's.  We mortgaged our future in the 80's, and now we are
>paying for it in the 90's.
>
>
>-- 
>
>=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
>Randall Rhea                                        Informix Software, Inc. 
>Project Manager, MIS Sales/Marketing Systems    uunet!pyramid!infmx!randall
>

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