Do you really think it's a good idea to get people to spend more money?

only because Marx got a bad name killing 120 million but principles are same

 

you are clearly a Marxist statist socialist or as the saintly Thomas Jefferson said, a consolidationist !

 

odd isn't it that Marx defined socialism as a stepping stone to communism but socialists tell us they want to stop short of communism when no libsocialist in human history has ever said the govt is big enough!! And isn't it odd that they pick the name socialist when it is perfectly correlated with marxism and 120 million dead?

 

Your understanding of economics is zero!

 

oh ya, and so is yours, but times 10!!!

PS: see how meaningless your style of brainless liberal banter is??

 

There are various degrees of knowledge whole. Your liberalism = socialism = communism = fascism indicates only chasm

 

The government ought not distort people's normal decisions. That leads to sub-optimal outcomes.

 

Even libertarian paternalism disagrees with that!

 

It is good for my economy if people spend more money on me.

The more people spend, the more taxes are raised. It's a skim.

 

Everyone, just a warning. Before you give Reiver any credence you should take a look at what he believes, when it comes to how individuals personally manage their wealth and what he thinks is best for the economy. He doesn't want people to frugally save, he wants people to spend, spend, spend, and pull all the equity out of their home to do it! If they have a home, that is, which he alludes it's better for the economy if they don't.

I say if an individual can't responsibly and prudently manage their own finances, the amalgamation of all those individuals together in the economy certainly can't.

Sometimes I suspect a lot of Keynesians actually lean on the collectivist side and don't take a very high view of individual private property (even though that's not inherently what Keynesianism itself is about).
In this instance, the simpleton bumpkin instincts of james M may not be so far off the mark.

Btw, I don't object to Reiver's socialist tendencies; I object to his economic irresponsibility, as I see it. He's trying to use liberal free market economics and Keynesianism as a framework to regulate in socialism, and that would be done in a very inefficient wasteful (did I mention irresponsible?) counterproductive manner.

All that damage and expense, you'd probably just be better off handing people free money. Certainly would cost less.

 

Spending is, in theory, better than saving on the collective scale, because of inflation. If you and everyone else are spending, that means some people are buying from you, which means you're getting money at its current value instead of holding money that is decreasing in value.

This all assumes that you're saving money instead of an actual resource, that you have something valuable to sell (like a skill) and that you are both spending and selling wisely.

 

People who never had a chance to talk with folks who lived through the Great Depression really missed out.

 

Yep, my grandmother told me some stories that were pretty unbelievable.

Well, a little less so now after what I've seen in the last 10 years.

 

I think its best to save a little. Every time I grocery shop, I buy a couple cans of storable food, or a bag of rice or something else that will keep for years. When I buy ammo, I buy enough to shoot and a little extra to stash. Etc with almost everything. Its not hard when its literally just a few bucks here and there. Hell- buy a bag of rice instead of a bottle of soda once a week and after a year, you'll have a pantry full of rice. Its better to keep your resources in circulation, but you gotta have a fallback jic circulation stops.

 

I need to save.
There are times in my life when I cannot earn.

If I do not save, I die.

 

You troll badly. There is no validity on any of your club. For example, I'm not a Keynesian. Indeed, unless you're an economist or a central bank official, you can't be a Keynesian. It's a school of macro thought after all.

Your use of Keynesianism also has the stench of noneconomic rant. What type of Keynesianism? Neo, New or Post? I'd be mostly sympathetic to Post. They've at least derived a price theory which is credible, unlike neoclassical marginal cost pricing.

 

Never mind encouragement of materialism, instead worry about encouraging debt. Consumer debt is now higher than it was just prior to the 2009 crash.

There is a huge housing crisis with people struggling to pay the bills and barely making mortgage payments each month.

Personal household savings rates are way down with a large percentage of households being one emergency away from bankruptcy and homelessness. About half of households have $1,000 or less on hand for unexpected expenses.

The reason for encouraging spending is that capitalism is in crisis like never before. The stock market rise is artificial fluff. The number of job openings isn't as great as they try to make us think it is due to the number of part-time jobs it includes. Capacity utilization is about 78%. The "too big to fail" banks of the 2009 crash are now even bigger. And interest rates are going up which will push inflation.

There are so many signs indicating cause for worry and the media are not talking about them.

 

One example of government encouraging spending is this year's $1+ trillion in deficit spending. We have no recession, no need to spike the economy, no national emergencies, and we're not investing for the future, yet government is spending $1+ TRILLION in money it does not have. Obviously the people who benefit from this spending will in turn spend more but is it sustainable? This deficit spending is creating about 10 million US jobs! IMO we have a fake economy pumped up by deficit spending. Take away the $1+ trillion in deficit spending and what will the US economy look like? Not if, but when we have the next recession, there might be few tools to combat the ill effects...economically IMO we are living dangerously...

 

Not just take away the $1 trillion, but take away another $1+ trillion in paying it back.

Some people argue for a multiplier effect, but that cuts both ways; if you add deficit spending to the economy it grows, if you have to start cutting money out of the economy to pay it back, it contracts, also with a multiplier effect.

We can work this out mathematically and see there's no way the multiplier effect during the growth phase can create economic growth greater than what the multiplier effect of taking it away will be.

Just a very quick illustration: 1 multiplied by 3, multiplied by 1.2 growth, then divided by 3.
That's no greater than simply 1 multiplied by 1.2

The economic growth from the multiplier can't offset the future economic contraction. The only way that could possibly happen is if the interest maintenance on the debt was lower than the increased economic growth resulting from deficit spending, and that's not too likely. Especially because the real interest maintenance costs on the debt are higher than current Treasury bond rates, since the Fed is effectively subsidizing them.
And of course only a certain portion of the economic growth we do see is caused by deficit spending.

 

I bold above how do you know how much economic growth is created by the $1+ trillion deficit spending? $18.5 trillion (*) 2.2% growth = $407 billion increase. $1+ trillion passed onto the consumer which is then spent into the economy generated how much GDP?

 

GDP or negative GDP?

I think debt is the economy contracting.
It's negative growth.

Overspend not underspend.

When you consume your wealth, you have less not more.

Otherwise Greece would be mega rich. But it is poor.

 

You know, most of wealth should be shared by the limited rich people in the World now.

It's a good idea about consideration of the plan to make men purchasing products for growth of economy, but rich people like investment plans rather than just consuming wealth.

It is the fact of the World economy.

 

Isn't it more about realising that their wealth is largely illusionary and that it only continues through continued exploitation of the workers?

 

It's actually due to the workers' exploitation of their employers.

 

Can you refer to any economic theory or empirical evidence in favour of that ludicrous comment?

Fake libertarians do tend to struggle...