Keynes's analysis provides an explanation--though there is debate among economists whether it is the correct one--for England's persistent high unemployment in the interwar period, or more precisely for the component that represented involuntary unemployment, the plight of unemployed workers who would have preferred to work at a wage below the prevailing rate than to be on the dole. One might think that wages would have fallen to a level at which anyone who wanted a job could have found one. But Keynes pointed out that since workers are a high proportion of all consumers, a fall in the wage level will reduce incomes, and therefore reduce consumption and investment, unless prices fall proportionately. They would be likely to fall somewhat, because producers' labor costs will be lower.
But a general fall in the price level--deflation--imperils economic stability, and actually cutting workers' wages to make room for the unemployed is a surefire formula for industrial strife.
And workers are not fungible. A factory that employs 100 highly skilled workers may have a lower average cost of production than one that employs 120 less-skilled workers at a lower wage. Only if demand for goods is high may the market have room for a firm that, because it employs those less skilled workers, has higher costs of production than the existing firm.
Thus a high level of involuntary unemployment could be, as Keynes showed, an equilibrium, rather than a temporary result of the business cycle. His analysis casts a particularly bright light on the cyclical downturns that we call recessions, or in extreme cases depressions. For when the demand for goods and services falls, as in the present downturn, the economic environment becomes unsettled and even the near future becomes unpredictable. This dampens businessmen's animal spirits and causes consumers to hoard--and businessmen as well. For when the urge to action deserts them, they build up their cash balances, in lieu of active investment, in order to hedge against uncertainty. Owing to uncertainty, businessmen even in the best of times lack "strong roots of conviction" in their estimate of what the future holds, and so a sudden change in economic conditions can paralyze them. If so, a downward spiral will develop, as falling demand and falling investment reinforce each other, causing layoffs that reduce incomes and therefore consumption and production, and so induce more layoffs.
But the government may be able to arrest the decline--another of Keynes's central ideas, and one strongly resisted by the conservative economists of his time, as of today. It can reduce interest rates (by buying government bonds or other debt for cash, which increases the amount of money that banks are permitted to lend) in an effort to reduce the costs of active investment and thus encourage employment. Keynes urged this approach. But he also pointed out that it might not work well--as we have learned in the current downturn. The banks may lack confidence in "those who seek to borrow from them," so that "while the weakening of credit is sufficient to bring about a collapse, its strengthening, though a necessary condition of recovery, is not a sufficient condition." In fact, banks in America today are hoarding, rather than lending, most of the cash that they have received from the government's bailouts. The hoard may make the banks a little freer with lending, but the effect on economic activity, at least in the short run, may be tepid.
Fortunately, there is more that government can do to arrest a downward economic spiral besides pushing down interest rates. It can offset the decline in private consumption and investment in a recession or a depression by increasing public investment. When we say that the government builds highways, we mean it buys highways from private contractors. And the more it buys, the more that investment--and because of the multiplier effect, the more that income, output, and employment--are stimulated. And because private decisions to invest and to consume are influenced by confidence in the future, or the lack thereof, the government must do everything it can to convince businessmen and consumers that it is resolute and competent in working for economic recovery. An ambitious public-works program can be a confidence builder. It shows that government means (to help) business. "The return of confidence," Keynes explains, "is the aspect of the slump which bankers and businessmen have been right in emphasizing, and which the economists who have put their faith in a ‘purely monetary' remedy have underestimated." In a possible gesture toward Roosevelt's first inaugural ("we have nothing to fear but fear itself"), Keynes remarks upon "the uncontrollable and disobedient psychology of the business world."
But for a confidence-building public-works program to be effective in arresting an economic collapse, the government must be able to finance its increased spending by means that do not reduce private spending commensurately. If it finances the program by taxation, it will be draining cash from the economy at the same time that it is injecting cash into it. But if it borrows to finance the program (deficit spending), or finances it with new money created by the Federal Reserve, the costs may be deferred until the economy is well on the way to recovery and can afford to pay them without endangering economic stability. When investors passively save rather than actively invest, government can borrow their savings (as by selling them government bonds) and use the money for active investment. That is the essential Keynesian prescription for fighting depressions.
Keynes's emphasis on consumption as the driver of active investment and hence of economic growth may seem to give his theory a hedonistic flavor. He was indeed hostile to thrift, which is another name for hoarding. We have seen the damaging effects of thrift in the current downturn, in which rich people's forswearing luxury purchases in the name of thrift has reduced employment in the retail sector, thus deepening the downturn. This is an example of the "paradox of thrift." "Prodigality is a vice that is prejudicial to the Man, but not to trade," in the words of the seventeenth-century economist Nicholas Barbon, quoted by Keynes. (The full paradox of thrift is that, if incomes fall far enough because people are saving rather than consuming, savings will actually decline.)
Keynes commends FDR for having destroyed agricultural stocks during the Great Depression, since sales from existing inventories do not stimulate active investment, but are actually a form of disinvestment. He even discusses sympathetically, though ultimately he rejects, the curious proposal of "stamped money," whereby people would be required to have their currency stamped periodically at a government office in order to remain legal tender, because the bother of having to get one's money stamped would have the effect of a tax on hoarding.
All this may seem like an incitement to profligacy, consistent with Keynes's rather bohemian private life as a charter member of the Cambridge Apostles and the Bloomsbury group. But nothing in his theory limits consumption to the purchase of frivolous private goods, or indeed to private goods of any kind. I gave the example of a public highway; other examples are the purchase of military equipment for national defense and the public subvention of education and art. And while he famously (or notoriously) argued the value of unproductive projects--or so they would seem to us--such as the building of the Egyptian pyramids, on the ground that they provided employment, which increased consumption (the workers, even if they were slaves, had to be fed and clothed and housed), he preferred that governments undertake productive projects.
Correctly anticipating the rapid growth of living standards, moreover, Keynes predicted that within a century people's material wants would be satiated, and so per capita consumption would stop growing. People would work less, but only because their need for income, and more important their desire for it, was less. And then the challenge to society would be the management of unprecedented voluntary leisure. This was a popular 1930s theme--think of Huxley's Brave New World--but it underestimated the ability of business to create new wants, and new goods and services to fulfill them.
That was merely a mistake, an oddity in Keynes's belief in the possibility of perpetual boom. He has wise words, which Alan Greenspan and Ben Bernanke could with profit have heeded earlier in this decade, about the need to raise interest rates to prick an asset-price bubble before it gets too large. Yet just a few pages earlier he remarked that "the remedy for a boom is not a higher rate of interest but a lower rate of interest! For that may enable the so-called boom to last." (That may have been what Greenspan thought!) The statements can be reconciled by observing that as long as there is involuntary unemployment, low interest rates, by stimulating active investment and therefore production without raising labor costs, should not produce inflation. But we have just seen, in the United States of the 2000s, how even if labor costs are steady, low interest rates can produce an asset-price inflation (the housing and credit bubbles) that can precipitate an economic collapse. Keynes had earlier in his career written prophetically about the potentially disastrous effects of inflation. There is almost no mention of inflation in The General Theory, but he does say what many of his successors forgot--that when an economy no longer has any involuntary unemployment, further efforts to stimulate demand will merely cause inflation.
Perpetual-boom thinking illustrates the left-leaning utopian strain in The General Theory. This was what made Keynes a bête noire for conservatives, but it charms Skidelsky, who devotes the last chapters of his book to celebrating Keynes as a "green," a philosopher of limits to growth, of "the good life" lived simply, even of the end of economics. Recall Keynes's erroneous prediction that within a century people's material wants would be satiated. When that happened, the demand for capital (to finance consumption) would plummet and rentiers (people who live on income from passive investments, such as stocks or bonds, and thus are hoarders) would be wiped out--a prospect that delighted Keynes, who looked forward to "the euthanasia of the rentier," though fortunately he did not mean this literally. He questioned free trade--that holy of holies of conventional economists--by pointing out that a country whose people had a low propensity to consume could stimulate investment by depreciating its currency so that its exports were attractive, because that would encourage its industries to invest in producing for foreign consumption and therefore to employ more workers. The country would accumulate foreign currency that it could use to invest abroad--the policy that China has been following lately, with pretty good results. He even had kind words for usury laws, arguing that they had reduced interest rates and thus discouraged hoarding. He favored a heavy estate tax, reasoning that it would increase consumption by reducing accumulation for bequests. (The standard economic argument against the estate tax is identical--it encourages "wasteful" consumption!)
Although there are other heresies in The General Theory, along with puzzles, opacities, loose ends, confusions, errors, exaggerations, and anachronisms galore, they do not detract from the book's relevance to our present troubles. Economists may have forgotten The General Theory and moved on, but economics has not outgrown it, or the informal mode of argument that it exemplifies, which can illuminate nooks and crannies that are closed to mathematics. Keynes's masterpiece is many things, but "outdated" it is not. So I will let a contrite Gregory Mankiw, writing in November 2008 in The New York Times, amid a collapsing economy, have the last word: "If you were going to turn to only one economist to understand the problems facing the economy, there is little doubt that the economist would be John Maynard Keynes. Although Keynes died more than a half-century ago, his diagnosis of recessions and depressions remains the foundation of modern macroeconomics. His insights go a long way toward explaining the challenges we now confront. . . . Keynes wrote, ‘Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slave of some defunct economist.' In 2008, no defunct economist is more prominent than Keynes himself."
Richard A. Posner is a judge on the U.S. Court of Appeals for the Seventh Circuit and a senior lecturer at the University of Chicago Law School.
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COMMENTS (12)
The more we learn from the macroeconomic theorists the more we learn how macropolitical handlers always finds a way to feed it to the beasts on Wall Street.
Keynes, Friedman. Fiscal, monetary. Democrats, Republicans. Liberals, Conservatives. Come on, it draws more folks in or out of the economy, more folks in or out of the government. But it doesn't change the fundamental nature of crony capitalism.
And maybe it never will. And maybe it never should. I'll leave that to the ever conflicted and contradictory experts. Economists, for example. And pundits.
My point is always to pull the fig leaves off the rhetoric that adorns both the prescriptions and the proscriptions of folks in places like t ... view full comment
The more we learn from the macroeconomic theorists the more we learn how macropolitical handlers always finds a way to feed it to the beasts on Wall Street.
Keynes, Friedman. Fiscal, monetary. Democrats, Republicans. Liberals, Conservatives. Come on, it draws more folks in or out of the economy, more folks in or out of the government. But it doesn't change the fundamental nature of crony capitalism.
And maybe it never will. And maybe it never should. I'll leave that to the ever conflicted and contradictory experts. Economists, for example. And pundits.
My point is always to pull the fig leaves off the rhetoric that adorns both the prescriptions and the proscriptions of folks in places like this; intellectuals who always place the emphasis on a clash between policy, politics or principle....and hardly ever on a clash between those who vie to be in charge of the revolving doors, the campaign finance reform legislation and regulating the dastardly deeds of the lobbyists. Tweedle dee or tweedle dum some call them. I just call them Congress and the White House
But let's keep it that way, right? Let's keep it tasked to the authorized disseminators of the authorized inflection points.
george
Keynes being a revelation to Posner is, I suppose, on a par with parenthood being a revelation to young couples today. Not mentioned by Posner is the effect of concentrations of wealth. If consumption is the primary force for economic activity, then it follows that concentrations of wealth is a drag on economic activity, for the marginal propensity to consume by the wealthy is much lower. But what about the conspicuous consumption by the wealthy, from mansions to jet planes, doesn't that offset the lower propensity to consume? In the short run it does, for the mansions and planes must be produced. But in the long run do those mansions and jet planes add to the wealth, or productive capa ... view full comment
Keynes being a revelation to Posner is, I suppose, on a par with parenthood being a revelation to young couples today. Not mentioned by Posner is the effect of concentrations of wealth. If consumption is the primary force for economic activity, then it follows that concentrations of wealth is a drag on economic activity, for the marginal propensity to consume by the wealthy is much lower. But what about the conspicuous consumption by the wealthy, from mansions to jet planes, doesn't that offset the lower propensity to consume? In the short run it does, for the mansions and planes must be produced. But in the long run do those mansions and jet planes add to the wealth, or productive capacity, of the economy? Hardly. It is mindboggling that the smart folks at Chicago and other centers of conservative thought still believe that supply creates its own demand, Keynes (and history) notwithstanding. My own view is that they consider Keynes' theory (or theories) as a slippery slope, for to accept demand (consumption) as the key to economic activity not only invites government intervention into the economy (to spur demand), but raises very distrubing (to them anyway) questions about the negative effects of concentrations of wealth. And that one does not do!
While Posner these days is thought a conservative, he has never been thought a capitalist as his career as a lawyer/judge shows.
There are huge issues with the math behind Keynesian theory. The 2 mains models:
- IS/LM model
- Phillips curve
have been widely discredited as insufficient. Math doesn't work, the theory doesn't model reality. They are at best a teaching tool. And any reputable econ course views them as such.
And original Keynesion theory ignored all micro-economic theory. It has been disproven. Monetary policy works. Even the Keynesion acknowledge that though they would warn of a theoretical 'liquidity trap' where monetary policy loses effect.
Keynesian theor ... view full comment
While Posner these days is thought a conservative, he has never been thought a capitalist as his career as a lawyer/judge shows.
There are huge issues with the math behind Keynesian theory. The 2 mains models:
- IS/LM model
- Phillips curve
have been widely discredited as insufficient. Math doesn't work, the theory doesn't model reality. They are at best a teaching tool. And any reputable econ course views them as such.
And original Keynesion theory ignored all micro-economic theory. It has been disproven. Monetary policy works. Even the Keynesion acknowledge that though they would warn of a theoretical 'liquidity trap' where monetary policy loses effect.
Keynesian theory is mostly for left leaning politicians to rationalize Gov spending. The worlds central bankers use monetary policy as they know better.
There will always be business cycles. And the more Gov. involvement in a market (like Mortgage Backed Securities) amplifies the cycle. The recent recession being used by the in-effective and inept to push a euro-socialist agenda.
That agenda will fail. Best outcome, Gov as referee for markets improving transparency. Worst outcome, Gov manages any part of economy.
R:
There are huge issues with the math behind Keynesian theory. The 2 mains models:
- IS/LM model
- Phillips curve
have been widely discredited as insufficient. Math doesn't work, the theory doesn't model reality. They are at best a teaching tool. And any reputable econ course views them as such.
george:
R, I'm waiting for your rejoinder on the WealthCare thread. I proposed we begin a historic debate there about Rand, Capitalim and the dying art of silly polemics. Together, you and I can put Wealthcare back on top of the Most Views, and Most Comments blogs. Where it belongs.
Hmm...
The IS/LM model. Is that Leonard Piekoff's list of [giggle, giggle] mathematical calculations used by ... view full comment
R:
There are huge issues with the math behind Keynesian theory. The 2 mains models:
- IS/LM model
- Phillips curve
have been widely discredited as insufficient. Math doesn't work, the theory doesn't model reality. They are at best a teaching tool. And any reputable econ course views them as such.
george:
R, I'm waiting for your rejoinder on the WealthCare thread. I proposed we begin a historic debate there about Rand, Capitalim and the dying art of silly polemics. Together, you and I can put Wealthcare back on top of the Most Views, and Most Comments blogs. Where it belongs.
Hmm...
The IS/LM model. Is that Leonard Piekoff's list of [giggle, giggle] mathematical calculations used by Congress, CNBC and Wall Street to measure precisely the inflection point when laizze faire market capitalism becomes state capitalism; then becomes outright socialism? Do you, Tim Geithner and Max Baucus still edit it in the Oval Office?
The Philips curve. Isn't that the one Laffer drew on a clump of toilet paper before he and the Chicago Boys retired from the outhouse in search of napkins in a restaurant?
Modelling reality. Okay, give us the model used to calibrate derivative transactions that factor in, say, inside information, Jim Cramer, fear, campaign contributions and taxpayer bailouts.
R:
....original Keynesion theory ignored all micro-economic theory. It has been disproven. Monetary policy works.
george:
Where oh where is Roid when you need him!!!
A proposition: If anyone convinces Roid to come back in [or convinces Noam to have him released from Guantanamo] I promise to cut my Talkbacks down to less than 250 a day.
Has Keynesian macro theory been disproven by RyndDroid micro theory in the manner in which astrology has been disproven by astronomy? or alchemy disproven by chemstry? Can R provide us with a list of economists [qua physicists?] who will attest to this. Will it be longer than the Keynesians' list of economists who detest to it? Will the Right Theory be metaphysically [and romantically] sound?
And why oh why wasn't R and the other ubercapitalists in here a year ago explaining how the less than ubercapitalists on K Street and in Congress were opting for state capitalism instead? Couldn't they have saved us all a lot of grief?
R:
Keynesian theory is mostly for left leaning politicians to rationalize Gov spending. The worlds central bankers use monetary policy as they know better.
george:
Yes, the world's bankers were all over the housing bubble, weren't they? In fact, we don't know it yet but they kept feeding the Keynesians in the Bush Administration enough rope until they hanged us all. Now out of the ashes R will ride in from the Gulch with the True Believers. They'll ressurect the Gold Standard, send Alan Greenspan to a reeducation camp and set the economy to the task of finally bringing Atlas Shrugged to the silver screen. R will play both John Galt and Dagney Taggert. Rand will rise from the grave to play The Anti-Christ and President Glenn Beck will join her in finally reconciling Objectivists and Libertarians forevermore. Reconciling both transcendentally with Kant's God.
R:
There will always be business cycles. And the more Gov. involvement in a market (like Mortgage Backed Securities) amplifies the cycle. The recent recession being used by the in-effective and inept to push a euro-socialist agenda. That agenda will fail. Best outcome, Gov as referee for markets improving transparency. Worst outcome, Gov manages any part of economy.
george:
Marx couldn't have said it any better. Although he almost certainly did. Great big rhetorical bromides like this have always been the theoretical scaffolding of choice for those who dismiss the enormous complexies of the real world for the crystal clarity of, well, great big rhetorical bromides.
george walton
d/a
A wonderful piece from what has become that rarest of all things, a brilliant man with an open mind.
A wonderful piece from what has become that rarest of all things, a brilliant man with an open mind.
I agree with lsernoff. This is vintage Posner: Muscular, clear prose; well-informed argument; intellecutal seriousness without hand-wringing; skepticism of grand theory; responsiveness to the times; apparent open-mindedness; and a stubborn resistance to ideological caricature. One reason Judge Posner would face difficulty being confirmed to the Supreme Court if he were ever nominated -- and his prominent career makes him a natural candidate -- is that he writes a lot, writes a lot that doesn't fit either anodyne conventional wisdom on the one hand or rigid ideological orientations on the other, and he refuses to be bland. So, the Supreme Court's loss is the reading public's gain, I suppo ... view full comment
I agree with lsernoff. This is vintage Posner: Muscular, clear prose; well-informed argument; intellecutal seriousness without hand-wringing; skepticism of grand theory; responsiveness to the times; apparent open-mindedness; and a stubborn resistance to ideological caricature. One reason Judge Posner would face difficulty being confirmed to the Supreme Court if he were ever nominated -- and his prominent career makes him a natural candidate -- is that he writes a lot, writes a lot that doesn't fit either anodyne conventional wisdom on the one hand or rigid ideological orientations on the other, and he refuses to be bland. So, the Supreme Court's loss is the reading public's gain, I suppose.
That Judge Posner has introduced himself to Keynes and has told us about it is interesting and mildly informative. Three is no doubt the Obama administration is off on a love fest with what it believes to be Keynesian Economics -- an economics "for our time." But, I wonder. As much as one today is inclined to worship our great public thinkers, I am still concerned about the idea of debt. Just how are we to sustain the horrendous debt the United States is taking on? (Not a word about that in the Judge's piece. But, maybe I missed it. It could be part of a subtle insert.)
Keynes is fine with regard to saving capitalism for the time being -- for the short term -- but I do not recall the ... view full comment
That Judge Posner has introduced himself to Keynes and has told us about it is interesting and mildly informative. Three is no doubt the Obama administration is off on a love fest with what it believes to be Keynesian Economics -- an economics "for our time." But, I wonder. As much as one today is inclined to worship our great public thinkers, I am still concerned about the idea of debt. Just how are we to sustain the horrendous debt the United States is taking on? (Not a word about that in the Judge's piece. But, maybe I missed it. It could be part of a subtle insert.)
Keynes is fine with regard to saving capitalism for the time being -- for the short term -- but I do not recall the great hedonist said anything about taking on debt which is, well, quite simply, beyond the capacity of human comprehension, much less government repayment.
isernoff:
A wonderful piece from what has become that rarest of all things, a brilliant man with an open mind.
george:
I'm not familiar in depth with Posner. I'm not an intellectual. So, how open then is his mind on stuff like this:
* crony/state capitalism
* the military industrial complex
* the health care industrial complex
* the workings of K Street
Posner is usually associated with the laizze faire Chicago School of economics; so his trek to Keynes is certainly more welcome [to me] than had it been the other way around.
But where does he start drawing the lines in a discussion of political economy in America? In all the approproate places perhaps?
george
isernoff:
A wonderful piece from what has become that rarest of all things, a brilliant man with an open mind.
george:
I'm not familiar in depth with Posner. I'm not an intellectual. So, how open then is his mind on stuff like this:
* crony/state capitalism
* the military industrial complex
* the health care industrial complex
* the workings of K Street
Posner is usually associated with the laizze faire Chicago School of economics; so his trek to Keynes is certainly more welcome [to me] than had it been the other way around.
But where does he start drawing the lines in a discussion of political economy in America? In all the approproate places perhaps?
george
seugster:
Three is no doubt the Obama administration is off on a love fest with what it believes to be Keynesian Economics -- an economics "for our time."
george:
No doubt? Oh, please. Given the love nest Obama and Geithner Inc. has set up on Wall Street how exactly is this a solid Keynesian approach to the relationship between government and the economy? How, for example, is it wildly at odds with the Friedman apologists in the Bush Administration? What has Obama done differently? It's just a difference of degree not kind.
In the end, they all serve the same master: Whatever works to keep everything more or less exactly the same.
We are watching this unfold right now with health care "reform". ... view full comment
seugster:
Three is no doubt the Obama administration is off on a love fest with what it believes to be Keynesian Economics -- an economics "for our time."
george:
No doubt? Oh, please. Given the love nest Obama and Geithner Inc. has set up on Wall Street how exactly is this a solid Keynesian approach to the relationship between government and the economy? How, for example, is it wildly at odds with the Friedman apologists in the Bush Administration? What has Obama done differently? It's just a difference of degree not kind.
In the end, they all serve the same master: Whatever works to keep everything more or less exactly the same.
We are watching this unfold right now with health care "reform". After the legislation is signed let's start tallying up what has really changed.
george
seugster: Good question. I think the usual response is two-fold. First, debt for a money-printing entity only matters insofar as it leads to inflation -- not a problem now and not a problem given the amounts in question. I think that's a widely held, though not unanimous, view among economists. We can take on big debt -- it's not beyond human comprhension; just big -- if there's worldwide confidence in our continued prosperity. The notion that a government is like an individual and should always balance its checkbook is pointless, unrealistic, and harmful. Second, your suggestion of taking on big debt "for the short term" is, I think, perfectly Keynesian. During good times, we do re ... view full comment
seugster: Good question. I think the usual response is two-fold. First, debt for a money-printing entity only matters insofar as it leads to inflation -- not a problem now and not a problem given the amounts in question. I think that's a widely held, though not unanimous, view among economists. We can take on big debt -- it's not beyond human comprhension; just big -- if there's worldwide confidence in our continued prosperity. The notion that a government is like an individual and should always balance its checkbook is pointless, unrealistic, and harmful. Second, your suggestion of taking on big debt "for the short term" is, I think, perfectly Keynesian. During good times, we do restraint and balanced budgets and pay down debt and rely on monetary solutions to manage the economy. (See Clinton/Greenspan.) During tough times, though, we soften the blow of big downturns and avert potential economic disaster by introducing more aggressively the spender of last resort -- the government -- into the economy. I think that's roughly the idea. It's not the usual approach. But sometimes monetarist solutions are insufficient. When interest rates are zero, and we're still in free-fall, there's a problem. The model didn't work this time, as even Greenspan acknowledged. Posner is impressed by the depth of the crisis we faced and the serious threat of depression and the collective cluelessness of the profession in offering solutions. Such times call for unusual measures, but not forever. This is consistent with the Obama administration's approach. It does stimulus -- deficit spending, borrowing -- to avert calamity and soften the blow. Some say, not enough. But, when it comes to the long-term commitments, like health care, Obama insists on deficit neutrality and emphasizes cost control.
Who the heck is George? Am I missing something. Is it some inside bit?
To George:
"Whatever works to keep everything more or less exactly the same" ?
What, pray tell is that supposed to mean? The simple fact is Washington (it really does not make much difference who is in control (and the Wasilla Snobilly is not going to help -- nor are any of her handlers)). The debt is going to go over the top and for many decades to come.
And, there is going to be no way to lower it and more money will have to be printed because no one is to going to buy the debt to the degree it must needs be bought. And, of course, if you are a Keynesian or a Posnerarian (now), you will have to find a way to put mone ... view full comment
Who the heck is George? Am I missing something. Is it some inside bit?
To George:
"Whatever works to keep everything more or less exactly the same" ?
What, pray tell is that supposed to mean? The simple fact is Washington (it really does not make much difference who is in control (and the Wasilla Snobilly is not going to help -- nor are any of her handlers)). The debt is going to go over the top and for many decades to come.
And, there is going to be no way to lower it and more money will have to be printed because no one is to going to buy the debt to the degree it must needs be bought. And, of course, if you are a Keynesian or a Posnerarian (now), you will have to find a way to put money into the economy, the American one -- forget about Mexico or Canada or any other "local" econommy.
But, I am sure I am confused. Just as the rest of the 280 million or so people who live here are who do not have friendships amongst the the American Ruling Class. That is, we did not go to Yale, Harvard, Princeton, Stanford or the University of Chicago, must be confused.
George -- I would be pleased to know what you are really saying. I will steel myself to be open minded and will even try, desparately but without much success to at least appear to be intelligent.
Look for me someplace at Costco or Walmart. I would love to have a conversation with you. Truly, what the hell else are we going to do as everything collapses around us.
seug:
To George:
"Whatever works to keep everything more or less exactly the same" ?
What, pray tell is that supposed to mean? The simple fact is Washington (it really does not make much difference who is in control (and the Wasilla Snobilly is not going to help -- nor are any of her handlers)). The debt is going to go over the top and for many decades to come.
george:
Well, over the past, I don't know, century or so the folks running the healthcare industry did not lose much sleep at night worrying about whether the rampaging cost of the healthcare delivery system in America would sink the economy.
And all the other democratic republics around the globe seem to have incorporated one or another ... view full comment
seug:
To George:
"Whatever works to keep everything more or less exactly the same" ?
What, pray tell is that supposed to mean? The simple fact is Washington (it really does not make much difference who is in control (and the Wasilla Snobilly is not going to help -- nor are any of her handlers)). The debt is going to go over the top and for many decades to come.
george:
Well, over the past, I don't know, century or so the folks running the healthcare industry did not lose much sleep at night worrying about whether the rampaging cost of the healthcare delivery system in America would sink the economy.
And all the other democratic republics around the globe seem to have incorporated one or another rendition of universal healthcare for their citizens without plunging them over into the debt abyss. Maybe because unlike us they aren't spending more money on their defense budgets than all the other nations of the world combined. You think?
Besides, these silly folks somehow got it into their heads that being a citizen entitled you to healthcare. You know, just for being a citizen!! Don't fool yourself, those Commies are still out there.
seug:
But, I am sure I am confused. Just as the rest of the 280 million or so people who live here are who do not have friendships amongst the the American Ruling Class.
george:
Huh? Kindly rephrase that please.
seug:
George -- I would be pleased to know what you are really saying. I will steel myself to be open minded and will even try, desparately but without much success to at least appear to be intelligent.
george:
Making me [and my psuedo-intelligence] the argument. That sounds awful familiar. Does TNR offer classes to readers on how to perfect this? The Editors, for example. Is there an inflection point named after me yet?
Let's start with the American Ruling Class [or as I prefer to call it, crony capitalism]. Is that just a myth? Okay, let's debate it.
seug:
Look for me someplace at Costco or Walmart. I would love to have a conversation with you. Truly, what the hell else are we going to do as everything collapses around us.
george:
I'll do that. Shall me meet in the back room reserved for the union busters or the one dedicated to preserving The American Way of doing business with Congress? Your call.
george