What is Keynesian economics?

Lmaoing @ you if you aren't Keynesian or support many Keynesian principles.

kys

Greece is a perfect modern day of failed Austrian policies. They have no control over their currency and are at the whims of the austerity police.

>I'm a monetarist

Can you elaborate more on your views, please?

You've missed out the most important objection the Keynesians have to the Austrian's counter: the money supply is not fixed, so the dollar does NOT come out of the private sector. Keynesians advocate deficit spending (not tax-and-spend) to revive a stalled economy. And even if the government takes the money out of the economy afterwards (which it doesn't actually have to) the private sector still has as much money as it started with.

>completely dodges the criticism of Keynesian economics and knocks down a strawman of Austrian economics
Just stop

Why do Keynesians assume that if you don't agree with their flawed models that you must be an Austrian?

The very fact that you feel the need to reply to get the last word in is pathetic

A better question would be why are they so cancerous

>What is Keynesian economics?
the delusional belief that a government can influence the rate of inflation and economic growth by trying to subtly adjust the money supply.

but the sad fact is these things have much greater momentum than to be fucked with in such a manner it only introduces instability and bigger waves and bigger crashes into the system.

t. neoliberal who has yet to realize that deviating from keynesian economics has caused all the shit you are currently seeing

the 60's/70's were a better time

Why do Austrians think they have a valid opinion about anything?

Not an argument

i'm fairly convinced austrians think they have a valid opinion on everything user.

Why do you regard that as delusional? Theory and observation concur it is true in most circumstances; it's only when there's a supply shock that the control can be lost.

The claim that it only introduces instability is laughable; the system is inherently unstable, and countercyclical government intervention reduces that instability.

>government intervention reduces that instability.
well this is where the two schools thoughts differ i guess. keynesians obviously think that what they are doing is a good idea, but the truth is they have proven that they can't influence spending and velocity of money by printing money the effect is delayed and added to the increased base money supply when it happens they can cut back all they want the inflation will be much much more severe than it would have without their meddling and the recessions will also last longer, because pouring money into a system riddled with bad debt will not result in the cleansing of the system from bad debt it will only prolong it.

>but the truth is they have proven that they can't influence spending
No, that's a rather extraordinary lie that contradicts both experience and theory!

>the effect is delayed and added to the increased base money supply when it happens they can cut back all they want the inflation will be much much more severe
Oh, I see the problem: you're still under the impression that base money is more inflationary than other money. I suggest you read bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf for an overview of how money creation really works. The amount of base money is never ever the limiting factor. The real limiting factors for how much banks can lend are the supply of profitable customers for banks to lend to and (to a much lesser extent) the Basel capital requirements.

>and the recessions will also last longer, because pouring money into a system riddled with bad debt will not result in the cleansing of the system from bad debt it will only prolong it.
That's highly illogical for several reasons:
Firstly, recessions end when spending recovers and it's profitable for businesses to invest again. This occurs much much much sooner when the government pours money into the economy.

Secondly, more money pouring into the system will prevent a lot of the debt from turning bad.

Thirdly, more money pouring into the system will NOT impede the banks dealing with bad debt, but it will greatly reduce the economic and social impact of them doing so.

>No, that's a rather extraordinary lie that contradicts both experience and theory!
really? show me the evidence you talk about please! i would really like to troll a few guys with it!
>Oh, I see the problem: you're still under the impression that base money is more inflationary than other money.
you what? i have no words user...
>Firstly, recessions end when spending recovers and it's profitable for businesses to invest again.
no recessions end when trust and willingness to lend is regained. spending is a consequence, and the effects are more pronounced the more base money you printed in meantime that just sat on it's ass.

>Thirdly, more money pouring into the system will NOT impede the banks dealing with bad debt, but it will greatly reduce the economic and social impact of them doing so.
if this was true user if only this was true one could live with keynesians. the truth is however is banks may get rid of bad debts but only by dumping them on noisome else. somebody will take the fall if not the banks then the government (ie all the people). you you willingly spread the catastrophic folly and greed of the banks that resulted in the bad debt bubbling up to the population and saving the banks in fact rewarding them for doing it, and call it a job well done?

yo! this is not gonna end well.

i know keynesians think they can just balance somehow magically on these waves adding a little money to increase willingness to lend (didn't happen) and then cut back money as people try to lend too much and get greedy and give a little money to replace bad debt and let that bad debt destroy the previously created "wealth" out of thin air... but the truth is it's not what is going to happen most likely.

well whatever happens i have my popcorn and cash ready.

The fact that you get laughed off for being x or y in academia is retarded and everybody that does that should be shot. But holding yourself as x or y is stupid in itself since every side has good policies for something.

Aren't you talking about Monetarists?

The Rudd government's stimulus spending keeping Australia out of recession during the GFC is one example. Though revisionists try to attribute it to Chinese demand, their explanation fails to fit the facts; the surge in Chinese demand wasn't until a year later.

What I'd like to know is what made you think the government can't influence spending? Do you really think their actions have no consequences in the spending decisions of individuals and corporations?

>you what? i have no words user...
That's because you're bluepilled. You think the government controls the money supply by controlling the supply of base money. But that notion has no basis in reality. What actually happens is the government controls the money supply by adjusting interest rates so that there are more or fewer profitable lending opportunities for banks.

I urge you to read that link I provided, because if you don't know how things really work, you're likely to keep recommending bad policy based on false assumptions.

Willingness to lend and indeed to borrow is regained when banks and businesses can be confident of making a profit. As I said, base money is a red herring (and the central bank lets it adjust as needed anyway) but the recovery will be more pronounced when the government actively creates good conditions than when the government waits (possibly a few years) for them to gradually evolve.

> the truth is however is banks may get rid of bad debts but only by dumping them on noisome else.
If someone else is willing to buy them, that's true, but it's true whether the economy's going well or going badly.

There's really two separate issues here: the sale of misvalued assets before a bad debt occurs, and dealing with the consequences of bad debts. The former is what caused the subprime crisis which triggered the GFC, and is best addressed by better regulation.

(to be continued)

dolts across the spectrum

As much as I like the video, I have to second this.
Unbiased education comes first. Learn to mock Keynesian theory on your own.

That's some bold circlejerking.
I've never seen this before, but this is a good read.

I take it back, this goes off the rails. It's an okay read, just take it with a grain of salt.

(continued)

Regarding the second issue (others paying for banks' bad debts) that's got very little to do with Keynesian economics, and I do not support the government's response (which was more concerned with protecting the institutions than their protecting their function). If and when governments bail banks out, those banks should be legally prohibited from returning any money to their shareholders until the bailout money has been paid back in its entirety. But it would be better if we prevented them from reaching that situation in the first place.

There will probably always be some debt that turns bad. But if the government intervenes to avoid going into recession then the amount of bad debt will be less (because without the big drop in spending more businesses will be able to service their debts) and when a business does fail, the value of its assets will be higher so the bank's loss will be less.

It's not a matter of balancing on waves, it's a matter of compensating for them. Or better still, taking advantage of them. The government can spend more with less inflationary impact if they time it to coincide with when the private sector's spending less.

And finally, nobody's saying wealth's created out of thin air. Wealth is created from working. But money can be created out of thin air, enabling more people to keep working and thus more wealth to be created.

which part turned you off?

Maybe the Hitler part? Other people have taken on the banks besides him though

socialism

>afterwards the private sector still has as much money as it started with.

and thanks to the wonder of inflation the buying power of the money is decreased. almost like an invisible tax that makes the private sector pay for crap.

Why is that video cucking F. A. Hayek? What is this shit?

That's inflation. But government spending is no more inflationary than private spending. And government spending is far less inflationary at the times private sector spending is low than at the times the government's budget is balanced. That's because when private sector spending is low, there's less competition for workers and materials.

Some would say the defining feature of Keynesian economics is that it concentrates on the real outcomes rather than the financial outcomes. But over the whole economic cycle, the financial outcomes are also likely to favour Keynesian economics.

The economy in the '70s was a fecking mess, bruh.

As opposed to Keynesians' fiscal stimulus, I think that monetary stimulus is more effective. I'd favor that the monetary policy of the Fed and other central banks be guided by a nominal GDP targeting mechanism rather than an inflation targeting mechanism, since NGDP is usually a better indicator of recessions. Targeting a 4% NGDP target would be good, if NGDP growth is above 4% then money should be tightened and if it is below then money should be eased.

>Austrians
I mean it's pretty ironic that an Austrian is taking about this, you guys label pretty much anyone who disagrees with you an economic illiterate.

Why do you think monetary stumulus is more effective than fiscal stimulus? Do you think it's always more effective? Or merely more effective under certain circumstances? If the former, why do you think it's been so ineffective lately? If the latter, what circumstances?

There's absolutely nothing wrong with having the nominal GDP above 4%, so wouldn't it be better to have a primary GDP target and a secondary inflation target?

i think whether it's bailing out banks or pouring made up money into industry that didn't exist before (and is bleeding money all over the place because it shouldn't really exist) is the same shit.

when socialists do the same they are filthy retarded commies that can't into capitalism and efficient market, when capitalists do the same they are just a bit keynesians.

lol
nailed it!

i will look into this rudd thing, i don't normally study australia, but usually the thing is when a government manages to stop a recession it comes with a cost we see in japans case. a zombie economy devoid of it's original growth potential going nowhere. secondly the australian stimuli package looks like small beans to what's going on now. that was my first impression.

>That's because you're bluepilled. You think the government controls the money supply by controlling the supply of base money.
base money is important it gets multiplied by the movement of money. the total money supply dwarves the base money normally, but right now we have a contraction in money and an inflation in base money. it's scary user whatever you say it's like compressing a strong spring. you never know when it will slip and shoot out or snap.

>Willingness to lend and indeed to borrow is regained when banks and businesses can be confident of making a profit.
no. no. no. no. no. it's when their confidence is regains in each others ability to pay back loans. totally different shit! low confidence in profits just make people go for riskier investments, when they shy away from even safe investments that's because they don't feel safe and secure. you are badly mixing shit up like consequences and causes.

well your picture pretty much explains it. when investments in private sector are slow, public spending makes sure that the economy still keeps growing. when investments in private sector are high, you apply the "brakes" and try to slow down the investments in private sector

Japan's problem was the result of its government needlessly trying to balance its budget when they should have continued with the stimulus.

A large fiscal stimulus as soon as it is needed removes the need for an even bigger one later.

You seem to be under the mistaken impression that governments manipulate the money supply by controlling the amount of base money. Maybe they did that a century ago, but it's certainly not what happens nowadays.

Governments and central banks indirectly control the money supply by setting interest rates. Base money is not a constraining factor; more is always available to banks as and when needed.

Banks failing to lend to each other can be a problem in recessions. But though ti needs to be addressed when it occurs, doing so won't end the recession. The money has to get out into the real economy, and that happens when the borrower and lender both have confidence about the borrower's future income. Such confidence is in short supply in economic downturns because less money being spent means less opportunity to make money.

>but it's certainly not what happens nowadays.
yes now they just print the base money to oblivion out of fun because it doesn't manipulate anything i know.
>Governments and central banks indirectly control the money supply by setting interest rates.
i know they believe this, but it's again not what happens.
>Base money is not a constraining factor
no no it's a multiplier.
>Banks failing to lend to each other can be a problem in recessions.
no shit
>The money has to get out into the real economy, and that happens when the borrower and lender both have confidence about the borrower's future income.
now here is the thing: this does not fucking happen until the deflation is over, and in the inflationary surge it pours out but at that point nobody has much control over it. because by the time this happens every fucking body will know the deflation is over and doesn't matter what you do with interest rates you can flat-line them you will have inflation in spades.

because you were a stupid keynesian.

Keynes theory only works in economies that are similar to wartime economies

ever since the us was founded there was what 20 years it wasn't in war? us economy is wartime economy.

>i know they believe this, but it's again not what happens.
So why do you think they've been able to control inflation that way? Or do you think it was coincidence that raising interest rates put downward pressure on inflation?

>no no it's a multiplier.
The money multiplier is merely a ratio. The document from the Bank of England that I linked to dispels the myth that the amount of base money is the limiting factor. What more will it take to convince you?

>now here is the thing: this does not fucking happen until the deflation is over, and in the inflationary surge it pours out but at that point nobody has much control over it. because by the time this happens every fucking body will know the deflation is over and doesn't matter what you do with interest rates you can flat-line them you will have inflation in spades.
The statistics show we're not in deflation, so where's this inflationary surge you were expecting? Even with Keynesian intervention, it usually takes several years to get from the bust to the boom.

>raising interest rates put downward pressure on inflation?
yeah sure it puts a pressure alright. it's fairly simple to close the loan faucet, what they don't get is how hard it is to open them up again.

what limiting factor are you talking about? base money is a multiplier with velocity of money they give you the total money supply or as close to it as you get.

the economist may control base money supply but they can't fucking control the velocity it's pure mass psychology. and when it goes it goes right through the wall. multiplying the base money supply by 3 or more will mean the same velocity of money will cause inflation off the charts. you better pray to god it will not happen or the usd is fucked forever.

>The statistics show we're not in deflation
well that's a weird thing yes we are not technically but it's still lurking around the corner.

You're a literal fucking retard mate

Which courner are you talking about? The previous one? Or the next one?

BASE MONEY SUPPLY IS uNCONTROLLED!!!! If there's not enough, commercial banks just borrow more from the central bank. If there's an excess, they just borrow less from each other (not because of creditworthiness concerns but because there's less need to). Therefore the amount of base money makes no difference to how much banks can loan out.

Because there's a difference of about 1% between the interest rate the central bank charges commercial banks and the interest rate it pays them, the amunt of base oney has a small effect on the broad money supply (which is set by amount banks can lend profitably to businesses and consumers), but it can be compensated for by an interest rate change of less than 1%.

The money multiplier is just a ratio. They shoud've called it the "base money quotient" so people like you wouldn't've gained such an exaggerated view of its importance.

In a nutshell, Keynesianism advocates countercyclical government stimulus during recessions and aiming to balance budgets during expansion.

>Therefore the amount of base money makes no difference to how much banks can loan out.
are you willfully ignorant stupid or just plain stupid?

they are basically the "NO FUN ALLOWED" crowd then?

either pitch in some actual arguments or chill out cuck!

>look mom I posted it again XD

>Greece's problem is an inability to print money
>Not an inability to control debt funding a hilariously corrupt patronage state

How can I describe this in terms that make sense to you: Imagine you sit on a big dragon dildo. It hurts your ass but you love it because you're a massive faggot. People tell you to take the dildo out of your ass because it's disgusting but also because you'll tear your asshole. You ignore them though. You love rubber dragon cock. Eventually, your anus starts bleeding and people tell you that you shouldn't put any more lizard dick in your pooper but you ignore them and put even bigger plastic peckers in your butt. Eventually, you end up in the emergency room and they tell you if you put another reptile rod between your buns you will die. You go home, buy a St. George's Special XXXL Black 42" dick, shove it up your ass, and die.

No, just redpilled.

I know what actually happens and have tried to explain it to you. I've pointed out the false assumptions that your argument relies on, and told you what actually happens instead. I've even supplied you with a link to a document from an authoritative source (the Bank of England) that explains the money creation process. But it seems you just don't want to know; you are blind to anything that contradicts what you think you already know.

So I ask you your own question: are you willfully ignorant or just plain stupid?

You seem to have failed to comprehend that the problem that caused the current problem is not itself the current problem.