It's not Keynesian

[unbeliever]

I'm not an economics expert. But I know enough to have noticed that there's a hoax being perpetrated in western politics.

I'm referring to the idea that there's a legitimate school of economics which says that public spending on essentially anything somehow pays for itself in later growth.

 

This is often referred to as Keynesian economics.

https://en.wikipedia.org/wiki/Keynesian_economics

In reality it's a massive distortion of what Keynes taught.

 

Keynes was a believer in state stimulus. Keynes and others taught us that there are always economic cycles. That recessions, or at least significant slow-downs in the economy are normal. He advocated state borrowing and spending during these bad times to stimulate the economy. Such spending should be specifically on infrastructure. Only a small minority of state spending can be accurately described as infrastructure spending.

Crucially, when the economic weakness cycled away, the debt was to be repaid as a matter of urgency, so that credit and/or savings would be available for the next downturn.

 

Keynes was not a supporter of a minimal state, nor a supporter of widespread nationalisation. Merely moderate in this regard.

 

The idea that the modern "left" e.g. Labour have followed or are following Keynesian economics would be laughable if it wasn't so damaging.

There is no legitimate school of economics which says that you can or should borrow heavily during a boom. Nor that you should spend heavily outside infrastructure during a recession.

 

Labour's way doesn't work. There's no historical precedent for it working. It's not Keynesian. It makes no sense at all and it will never work.

 

Cheers.

[El Cid]

The idea that the modern "left" e.g. Labour have followed or are following Keynesian economics would be laughable if it wasn't so damaging.

There is no legitimate school of economics which says that you can or should borrow heavily during a boom. Nor that you should spend heavily outside infrastructure during a recession.

 

Labour's way doesn't work. There's no historical precedent for it working. It's not Keynesian. It makes no sense at all and it will never work.

 

Cheers.

 

Not sure what your point is, about Labour. Are you saying that they will spend too much, but havnt they said they would balance the books?

Didnt all parties borrow more, 20 years ago?

 

I dont see that todays parties are the same as decades ago, they have all learnt more.

[Anna B]

I'm not an economics expert. But I know enough to have noticed that there's a hoax being perpetrated in western politics.

I'm referring to the idea that there's a legitimate school of economics which says that public spending on essentially anything somehow pays for itself in later growth.

 

This is often referred to as Keynesian economics.

https://en.wikipedia.org/wiki/Keynesian_economics

In reality it's a massive distortion of what Keynes taught.

 

Keynes was a believer in state stimulus. Keynes and others taught us that there are always economic cycles. That recessions, or at least significant slow-downs in the economy are normal. He advocated state borrowing and spending during these bad times to stimulate the economy. Such spending should be specifically on infrastructure. Only a small minority of state spending can be accurately described as infrastructure spending.

Crucially, when the economic weakness cycled away, the debt was to be repaid as a matter of urgency, so that credit and/or savings would be available for the next downturn.

 

Keynes was not a supporter of a minimal state, nor a supporter of widespread nationalisation. Merely moderate in this regard.

 

The idea that the modern "left" e.g. Labour have followed or are following Keynesian economics would be laughable if it wasn't so damaging.

There is no legitimate school of economics which says that you can or should borrow heavily during a boom. Nor that you should spend heavily outside infrastructure during a recession.

 

Labour's way doesn't work. There's no historical precedent for it working. It's not Keynesian. It makes no sense at all and it will never work.

 

Cheers.

 

Surely we were in enormous debt after the second world war - America practically owned us!

Yet the Labour government set up the NHS, the welfare state, free higher education, as well as a massive programme of building and infrastructure. There were jobs for all who wanted them, including all the returning soldiers. And above all there was a positive, hopeful outlook, and everyone pulled together.

[Mister M]

Surely we were in enormous debt after the second world war - America practically owned us!

Yet the Labour government set up the NHS, the welfare state, free higher education, as well as a massive programme of building and infrastructure. There were jobs for all who wanted them, including all the returning soldiers. And above all there was a positive, hopeful outlook, and everyone pulled together.

 

I remember reading that we only paid off our debt to America just before the Millennium - and that we were more in debt than we are now.

 

I think the economic orthodoxy which preceded Keynes' day produced the crash of the 1920s and 1930s.

Edited November 9, 2015 by Mister M

[unbeliever]

I remember reading that we only paid off our debt to America just before the Millennium - and that we were more in debt than we are now.

 

After 6 years of total war it's hardly surprising. Our whole economy was turned over to surviving that conflict.

What's our excuse this time?

After many decades and a couple of lengthy periods of high inflation which devalued it, the debt fell to a reasonable fraction of GDP.

Edited November 9, 2015 by unbeliever

[tinfoilhat]

Surely we were in enormous debt after the second world war - America practically owned us!

Yet the Labour government set up the NHS, the welfare state, free higher education, as well as a massive programme of building and infrastructure. There were jobs for all who wanted them, including all the returning soldiers. And above all there was a positive, hopeful outlook, and everyone pulled together.

 

Blimey Anna there's rose tinted and there's rose tinted. There were jobs because there were lots of vacancies due to everyone who died in the war. There were jobs because great swathes of major cities were reduced to rubble. In 2008 woolworths closed down and the value of property dropped. Not really the same as 6 years of global conflict and genocide!

[unbeliever]

State debt is not a universally bad thing.

It's okay for the state to borrow for infrastructure spending. Keynes taught that a recession or down-turn is a good time to do this as it can help bounce you back into growth.

It is not, in any way, okay to borrow heavily during a lengthy period of strong growth. That's the time to pay down the debt.

Find me a school of economics which says otherwise.

[El Cid]

State debt is not a universally bad thing.

It's okay for the state to borrow for infrastructure spending. Keynes taught that a recession or down-turn is a good time to do this as it can help bounce you back into growth.

It is not, in any way, okay to borrow heavily during a lengthy period of strong growth. That's the time to pay down the debt.

Find me a school of economics which says otherwise.

 

Surely the right time to build up your infrastructure is when you have the money to do it. If you are in the 'good times' what else should you do?

 

So you are saying that u should borrow to build infrastructure that you didnt want to build in the good times, stuff that you dont really need, like HS2?

[I1L2T3]

I'm not an economics expert. But I know enough to have noticed that there's a hoax being perpetrated in western politics.

I'm referring to the idea that there's a legitimate school of economics which says that public spending on essentially anything somehow pays for itself in later growth.

 

This is often referred to as Keynesian economics.

https://en.wikipedia.org/wiki/Keynesian_economics

In reality it's a massive distortion of what Keynes taught.

 

Keynes was a believer in state stimulus. Keynes and others taught us that there are always economic cycles. That recessions, or at least significant slow-downs in the economy are normal. He advocated state borrowing and spending during these bad times to stimulate the economy. Such spending should be specifically on infrastructure. Only a small minority of state spending can be accurately described as infrastructure spending.

Crucially, when the economic weakness cycled away, the debt was to be repaid as a matter of urgency, so that credit and/or savings would be available for the next downturn.

 

Keynes was not a supporter of a minimal state, nor a supporter of widespread nationalisation. Merely moderate in this regard.

 

The idea that the modern "left" e.g. Labour have followed or are following Keynesian economics would be laughable if it wasn't so damaging.

There is no legitimate school of economics which says that you can or should borrow heavily during a boom. Nor that you should spend heavily outside infrastructure during a recession.

 

Labour's way doesn't work. There's no historical precedent for it working. It's not Keynesian. It makes no sense at all and it will never work.

 

Cheers.

 

For sure there's nothing particularly Keynesian about Labour policy over the past 20 years, nor for that matter in any of the policies Corbyn has put forward.

 

The bit you left out is who is making the claims that Labour have been following, or plan to adopt Keynesian policy. Who has claimed that?

 

Or maybe are you claiming that we need Keynesian policy and that Osborne should be adopting it?

[unbeliever]

For sure there's nothing particularly Keynesian about Labour policy over the past 20 years, nor for that matter in any of the policies Corbyn has put forward.

 

The bit you left out is who is making the claims that Labour have been following, or plan to adopt Keynesian policy. Who has claimed that?

 

Or maybe are you claiming that we need Keynesian policy and that Osborne should be adopting it?

 

Labour routinely claim to be following Keynesian economics.

Is this actually in doubt?

I can find some quotes if it is.

 

Osbourne is largely following actual Keynesian economics. I'm not sure I total agree with that, but at least he's generally following an actual school of economics rather than an imaginary one.