What happens to your theory though, if wages slowly remain stagnant, as prices slowly go up?
What happens to your theory though, if wages slowly remain stagnant, as prices slowly go up?
I honestly don't think Keynesians understand the broken window fallacy, even though Bastiat explained his fable very clearly in 1850.
What is the point of employment? Building a bridge to nowhere? Keynesians say yes - "spending is spending!"
Dig a hole, fill a hole...prepare ourselves for a space alien invasion that never comes...you and Krugman would call that 'growth', even though it serves no purpose or accomplishment. All you're doing is shifting around resources for no particular reason - ZERO wealth creation and progress.
As Henry Hazlitt explained:
"It is no trick to employ everybody, even (or especially) in the most primitive economy. Full employment — very full employment; long, weary, back-breaking employment — is characteristic of precisely the nations that are most retarded industrially."
The goal of economic activity is to produce consumption goods and services. Work is a necessary evil, not an end in itself. So your ideology of govt "using resources that aren't being used" (employing people for the sake of employing people, i.e., the Obama stimulus) is a fraud.
Money reflects what we do in the marketplace. Money measures wealth, it is not wealth in itself. It is a mere symbol - a claim on products and services people have created. Trading those goods and services is how we achieve a higher standard of living.
But Keynesians like you reject the traditional definition of money. Keynesians believe money controls the economy. Change the supply (spend! spend! spend!) and you can change the economic output the way a thermostat controls the room temperature. Ridiculous, but that's the insane Keynesian world we live in.
The global economy is headed for disaster because of your Keynesian mythology.
Gas prices obviously saving everyone now but the East coast it is even bigger because most homes still use oil to heat. Avg home needs about 75-125 gallons every 2-3 weeks weeks depending on weather so 2.22-2.35 a gallon compared to 4 bucks a big deal. Oil tanked right before winter started.
The worst inflation is the monopolies (telecommunications, utilities)
TV is gonna be disrupted in a big way the next 10-15 years with how expensive it is getting.
The worst inflation is the monopolies (telecommunications, utilities)
TV is gonna be disrupted in a big way the next 10-15 years with how expensive it is getting.
Bullshiz homie. We have reached your fundamental flaw... "a claim on products and services people have created". Products and services do not have to be "created" for money to have value. In fact one of the most useful roles of money is its ability to create demand for MORE products and services that have yet to be created.
No different than back in the day when people use to dig a useless metal out of the ground and all of a sudden people would do shit for it.
You have a fundamental misunderstanding of how economies work. And your understanding of money is seriously flawed.
This is a systemic issue where the have-nots are falling more behind. This is why I don't really get people demonizing all the protesters or organizers regardless of what they stand for. They may not be right in what the solutions are (most of them are uneducated and obviously can't articulate the true scope of the problems) but they are correct in the 1 basic premise that there is an extraction going on. An extraction of wealth, opportunity and standard of living.
Where is it coming from? Globalism, government, corporations...A lot of places you could look but they are correct in having their anger, it just perhaps isn't always focused correctly.
That is why a lot of these problems get marginalized because unfortunately the people who complain are mostly on the dumber end of the spectrum. You take a camera down to an OWS rally and you could make people look comically foolish pretty fast. Doesn't mean a system where an education costs almost as much as an avg home cost isn't F'd up.
More thermostat economics lol
Your entire theory of manipulating money in different ways (increasing supply or demand by turning a knob, manipulated interest rates, QE and other "last gasp" gimmicks for a failing system) is a mirage. And it will all crash once the market catches up to reality, just like the housing market woke up one day and caught up to reality. Only this time, the Fed won't be able to save itself.
Nothing lasts forever, especially fiat currencies because greedy politicians manipulating the thermostat just can't help themselves.
Long live free market capitalism - the best and only wealth creation tool in the history of mankind.
The dollar has eroded through inflation over time but that time has seen massive increases in standard of living for Americans across the board. Are you saying we've had a flawed monetary system for the last 100 years? The previous system wasn't perfect either and you likely know that.
This last 100 years includes 2 WWs, vietnam, korean war, our current affairs in the middle east...
This last 100 years includes 2 WWs, vietnam, korean war, our current affairs in the middle east...
That is not how I see it.
America was the world's number one economy long before the current flawed monetary system. How did that happen?
Think of the United States on a bell curve of history - ascension to empire (industrial revolution) > maturity (WW2) > over extension (welfare state, endless wars) > decline and legacy (the current state of the union).
The current monetary system was created for political progressivism (political class borrowing and spending as desired) - the opposite of the free market system which transformed the US into the world's number one economy.
You can see why people need double-income families to survive in 2015, whereas that wasn't the case 50 years ago (see over extension)
Food for thought:
By the end of WWI, Americans had more steel, food, clothing and coal than even the richest foreign nations. By 1920, the Unites States national income was greater than the combined incomes of Britain, France, Germany, Japan, Canada, and seventeen smaller countries.
By every objective standard, the United States was more dominant economically than it is today.
How did this happen?
a) Progressivism
b) The Fed
c) Keynesian economics
d) None of the above
:grandmais
By the end of WWI, Americans had more steel, food, clothing and coal than even the richest foreign nations. By 1920, the Unites States national income was greater than the combined incomes of Britain, France, Germany, Japan, Canada, and seventeen smaller countries.
By every objective standard, the United States was more dominant economically than it is today.
How did this happen?
a) Progressivism
b) The Fed
c) Keynesian economics
d) None of the above
:grandmais
