Yeah, the Boom is the time, but then the politicians start saying “how can we be taking all this tax income from hard working people” or “in this day of growth, too many are still being left behind!” and then they cut taxes and increase spending.
In the bust they feel they need to cut taxes and increase spending…basically the same response to different problems.
Er, the Clinton administration? You know, the one that actually paid down the national debt, and had budget surpluses? (Which the Bush II administration, with the sainted Greenspan’s blessing, promptly squandered.)
Fergawdsake, we have current, real-world demonstrations that Keynes was right. They’re called England. And Spain. And Ireland. And Greece.
When was the last boom the USA had austerity?
Er, the Clinton administration? You know, the one that actually paid down the national debt, and had budget surpluses?
Sorry only half correct. The Clinton Admin did have budget surpluses (which did prompt Congress to whine that it was unfair that taxes were so high and so many people were still in bad shape so spending needed to be increased). However, he did not pay down the national debt. It went up every year he was in office.
It started in 1993 at $4.4 trillion, the year before he left office it was $5.5 trillion and when he left office it was $5.6 trillion. All he did was slow the rate of increase in the debt. While they had surpluses, the “off-budget” costs took a big bite out of them and the surplus left over was re-directed away from debt pay down. (and the surpluses never exceeded what was being charged in interest.)
I think it should be obvious that for some, it’s the austerity itself, not the timing, that really matters. Good times or bad, the ultimate object is and has always been to dismantle the welfare state.
Will someone please explain to me why we should be listening to solutions offered by the same people who never saw the crash coming? Especially when their brilliant plan is to further depress demand, in a sort of cargo-cultish faith that if they sacrifice enough people’s lives and well-being, it’ll finally impress those elusive confidence fairies flitting by overhead.
If you squint your eyes just right, you can almost see them …
“most Keynesians I’ve talked to would claim that austerity would kill the boom…”
Then they aren’t real Keynesians are they?
It’s clear what Keynes sees as the role of government in the economy: Reduce economic uncertainty by smoothing out the bumps and valleys in the economic cycle. Flatten the highs with taxation and austerity, fill in the lows with deficit spending and stimulus.
Unfortunately, greed and political expedience take over during the boom and no one wants to sacrifice their share of the pie.
Nate Whilk says:
When was the last boom the USA had austerity?
March 18, 2013, 2:22 amWilliam Kone says:
Yeah, the Boom is the time, but then the politicians start saying “how can we be taking all this tax income from hard working people” or “in this day of growth, too many are still being left behind!” and then they cut taxes and increase spending.
In the bust they feel they need to cut taxes and increase spending…basically the same response to different problems.
March 18, 2013, 6:46 amH. E. Parmer says:
When was the last boom the USA had austerity?
Er, the Clinton administration? You know, the one that actually paid down the national debt, and had budget surpluses? (Which the Bush II administration, with the sainted Greenspan’s blessing, promptly squandered.)
Fergawdsake, we have current, real-world demonstrations that Keynes was right. They’re called England. And Spain. And Ireland. And Greece.
March 18, 2013, 10:54 pmSevesteen says:
Except most Keynesians I’ve talked to would claim that austerity would kill the boom…so there’s never time for austerity.
March 18, 2013, 11:24 pmWilliam Kone says:
When was the last boom the USA had austerity?
Er, the Clinton administration? You know, the one that actually paid down the national debt, and had budget surpluses?
Sorry only half correct. The Clinton Admin did have budget surpluses (which did prompt Congress to whine that it was unfair that taxes were so high and so many people were still in bad shape so spending needed to be increased). However, he did not pay down the national debt. It went up every year he was in office.
It started in 1993 at $4.4 trillion, the year before he left office it was $5.5 trillion and when he left office it was $5.6 trillion. All he did was slow the rate of increase in the debt. While they had surpluses, the “off-budget” costs took a big bite out of them and the surplus left over was re-directed away from debt pay down. (and the surpluses never exceeded what was being charged in interest.)
March 19, 2013, 8:49 amH. E. Parmer says:
I think it should be obvious that for some, it’s the austerity itself, not the timing, that really matters. Good times or bad, the ultimate object is and has always been to dismantle the welfare state.
Will someone please explain to me why we should be listening to solutions offered by the same people who never saw the crash coming? Especially when their brilliant plan is to further depress demand, in a sort of cargo-cultish faith that if they sacrifice enough people’s lives and well-being, it’ll finally impress those elusive confidence fairies flitting by overhead.
If you squint your eyes just right, you can almost see them …
March 19, 2013, 3:05 pmBruce says:
“most Keynesians I’ve talked to would claim that austerity would kill the boom…”
Then they aren’t real Keynesians are they?
It’s clear what Keynes sees as the role of government in the economy: Reduce economic uncertainty by smoothing out the bumps and valleys in the economic cycle. Flatten the highs with taxation and austerity, fill in the lows with deficit spending and stimulus.
Unfortunately, greed and political expedience take over during the boom and no one wants to sacrifice their share of the pie.
March 20, 2013, 3:03 pm