David_N
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Wow, see?
Nonsense from a guy who thinks its Govt job to influence demand directly.
Weve tried unprecedented fiscal and monetary stimulus since 2008. We've added Trillions of dollars in new debt since 2008 and the economy is still on life support
Japan tried fiscal stimulus in the 90s and Abenomics, it didn't work. It doesn't work because it papers over the real issues that have led to stagnantion and eventually the money runs out.
What am I supposed to be seeing? That the economy has a lack of consumer spending?Wow, see?
The govt is an entity that can get us out of this depressed state, yes, I agree.Nonsense from a guy who thinks its Govt job to influence demand directly.
Unprecedented? I suppose, after all, this was the greatest recession since the great depression, where massive government spending got us out of it. You have to look at potential output and the gap that needs to be filled. The stimulus that was passed, which barely lasted and was sort of all over the place, with low spending in relation to the gap, did not work well. We needed at least another 1 trillion spent on getting people back to work, increasing benefits to the unemployed, etc..Weve tried unprecedented fiscal and monetary stimulus since 2008.
And?We've added Trillions of dollars in new debt
Due to a lack of spending, yes.the economy is still on life support
If you keep bringing up Japan without understanding Japan, that's fine.Japan tried fiscal stimulus in the 90s and Abenomics, it didn't work.
First, you should never make comments on Japanese growth or lack thereof without taking demography into account. Japan has low fertility and low immigration; this has translated into a dramatically aging population and a declining working-age population.
Surprisingly:
I’ve used a log scale, so you can view vertical distances as percentage changes. If we look at growth from the early 1990s to the business cycle peak in 2007, we have growth of about 1.2% per year. That’s actually not bad; you can argue that demographically adjusted, the whole tale of Japanese stagnation is a myth.
What is true is that there were two long periods of depressed output relative to trend, one in the mid-1990s and another, much worse, between 1997 and 2007. And one other thing: Japanese monetary policy was still up against the zero lower bound in 2007, leaving it no room to counter the Great Recession, and hence leaving Japan open to a deep slump when exports plunged.
So how do we think about this problem? Here’s my take. Japan has pretty much spent the past 20 years in a liquidity trap; as I’ve been explaining for years, one way to understand such traps is that they happen when, even at a zero real interest rate, the amount that people would want to save at full employment exceeds the amount they would be willing to invest, also at full employment
But Japanese policy has never sought to achieve this. Deficit spending has put part, but only part, of the excess desired private saving to work; this has mitigated the slump, but not produced a booming economy, except perhaps briefly circa 2007. And the Bank of Japan has always pulled back on monetary policy when the economy looks better, instead of doing what it should, which is to keep the pedal to the metal until the inflation rate is solidly into positive territory.
The point is that as an analytical matter, Japan’s experience is perfectly consistent with an IS-LM type story, with nothing in there to suggest that fiscal stimulus has somehow backfired; stimulus has done exactly what you’d expect given its limited size and the refusal to take the opportunity to break out of the liquidity trap.
Yes, really. We're living in a country with depressed demand. We're not the only ones.
Here's one of my favorite economists discussing what the stimulus, at the bare minimum, should have been:
http://www.nytimes.com/2009/01/09/opinion/09krugman.html
Umm...quoted statistics from an article by the poster boy of government stimulus Paul Krugman is your idea of data/statistical proof from an unbiased source?
Paul Krugman - for this discussion - is the single least unbiased source on the planet.
BTW, it is completely impossible to prove a past life vent would be different under different circumstances.
So a correct answer to my question is: 'I cannot, I should have said I believe instead of stated things in a matter-of-fact manner'.
When will you people learn to stop saying 'things would have been so much better if...' when you should realize that that is not possible?
It does not aid in your cause.
I guess the C.B.O isn't a good source? I will admit they have some strange ideas, but they do have good data.Umm...quoted statistics from an article by the poster boy of government stimulus Paul Krugman is your idea of data/statistical proof from an unbiased source?
Than argue against what he's claiming. Attack what I've quoted, not the author. He's a famous economist who has good arguments. You never want to address them.Paul Krugman - for this discussion - is the single least unbiased source on the planet.
What am I supposed to be seeing? That the economy has a lack of consumer spending?
The govt is an entity that can get us out of this depressed state, yes, I agree.
Unprecedented? I suppose, after all, this was the greatest recession since the great depression, where massive government spending got us out of it. You have to look at potential output and the gap that needs to be filled. The stimulus that was passed, which barely lasted and was sort of all over the place, with low spending in relation to the gap, did not work well. We needed at least another 1 trillion spent on getting people back to work, increasing benefits to the unemployed, etc..
And?
Due to a lack of spending, yes.
If you keep bringing up Japan without understanding Japan, that's fine.
But let's look at Japan:
http://krugman.blogs.nytimes.com/2013/02/05/the-japan-story/
We tried a one-time fiscal stimulus, the ARRA, which was very small, was approved and implemented after things got worse. It was in no way sufficient to make up for the huge declines in household wealth. What it did prove was that the effects it had more than paid for itself. And even you have adopted the narrative that the QE's were ineffective due to the lack of large fiscal actions.Weve tried unprecedented fiscal and monetary stimulus since 2008. We've added Trillions of dollars in new debt since 2008 and the economy is still on life support
Krugman ? Lol !
We tried a one-time fiscal stimulus, the ARRA, which was very small, was approved and implemented after things got worse. It was in no way sufficient to make up for the huge declines in household wealth. What it did prove was that the effects it had more than paid for itself. And even you have adopted the narrative that the QE's were ineffective due to the lack of large fiscal actions.
We tried a one-time fiscal stimulus, the ARRA, which was very small, was approved and implemented after things got worse. It was in no way sufficient to make up for the huge declines in household wealth. What it did prove was that the effects it had more than paid for itself. And even you have adopted the narrative that the QE's were ineffective due to the lack of large fiscal actions.
Japan tried fiscal stimulus in the 90s and Abenomics, it didn't work. It doesn't work because it papers over the real issues that have led to stagnantion and eventually the money runs out.
The thread is nonsense. The proposed solution is nonsense.
Your post that claims the world lacks aggregate demand is nonsense.
Borrowing, printing and spending our way to prosperity is nonsense.
Then next time quote the CBO directly, not Paul Krugman.I guess the C.B.O isn't a good source? I will admit they have some strange ideas, but they do have good data.
Than argue against what he's claiming. Attack what I've quoted, not the author. He's a famous economist who has good arguments. You never want to address them.
Does the author ever take into account the gap that needed to be filled and the actual data in regards to the to little to late stimulus?he shows how the stimulus was a failure even if you take for granted liberal assumptions about economic policy (such as Keynesian economic theory), since it was so badly designed and executed that it failed to achieve its goals, spending wastefully while failing to revive the economy.
So what is your realistic economic solution to our current condition?
Then next time quote the CBO directly, not Paul Krugman.
Oh, and though the CBO are pretty good, they are not, IMO, completely unbiased. The techniques they used for their conclusions are sometimes incredibly flawed.
In other words, they sometimes interpret the data before they present it.
I have made my points time and time again on these matters...using data/stats from unbiased sources.
If they are not good enough for you...I don't much care (no offense).
And I have (to my knowledge) never claimed that a past macroeconomic event would have been better or worse under different circumstances.
I simply post stats/data and usually let others draw their own conclusions.
I am (usually) not remotely interested in engaging in long-winded debates on theories...I am only interested in data/facts from unbiased sources.
Simply look at history when governments let the economies recover on their own OR when they tried to stimulate them with various government stimuli and the answer to which is better will reveal itself.
Once again (it seems), we are done for now.
Good day.
You mean when recessions were longer and happened more often? LOLSimply look at history when governments let the economies recover on their own OR when they tried to stimulate them with various government stimuli and the answer to which is better will reveal itself.
He has done a lot of work on Japan and I think his analysis is valid. Why don't you ever want to talk about Japan's lack of inflation, high savings rate, and lack of spending? Like Krugman says, they're trapped.
Doesn't take long for people to jump into threads spewing nonsense.
You think ~50k is rich?
Japan spent theirselves into having the highest debt to GDP ratio in the world and then entered into Monetary stimulus to supress their rates and avoid a default on their debt.
Lack of inflation is just ANOTHER indicator of how weak our and their and the worlds economy is so why do you keep bringing it up ?
You need to explain how their government debt is responsible for their current problems. I will be waiting since you won't be able to do this, since Japan's problems stem from private sector debt. Japan also has a shrinking population/aging population, with no new immigration and they're pretty much already at "full employment" as mainstream economists define it with a massive lack of spending/investment/at risk of deflation. Nothing that comes from their government debt.Japan spent theirselves into having the highest debt to GDP ratio in the world
Because you would think with "massive stimulus's" that inflation would occur. You know why it's not? PEOPLE AREN'T SPENDING. LOOOOOOL.Lack of inflation is just ANOTHER indicator of how weak our and their and the worlds economy is so why do you keep bringing it up ?
It's actually sad what is happening to the world right now. We're facing a problem, a lack of demand and a failure to effectively utilize available resources. We have people from the right and left shouting from the top of their lungs that currency issuers can't afford to spend anymore and need to increase taxation to "fund" spending, which doesn't do much to solve the demand problem. In order to get future growth, private sector debt will have to skyrocket. Unless the government decides to spend more.
It started with nonsense, so I just figured Luther was continuing the trend...
Here's my contribution to the nonsense:
Three-letter names, you may find them quite breezy;
IRS, KGB, they make me feel queasy.
INS, FBI?
You’re scared? So am I.
My favorite? That’s KFC, easy
Uh, Japan has the same economy and demographics.....as the US. Good to know.Japan spent theirselves into having the highest debt to GDP ratio in the world and then entered into Monetary stimulus to supress their rates and avoid a default on their debt.
Lack of inflation is just ANOTHER indicator of how weak our and their and the worlds economy is so why do you keep bringing it up ?
When you have money, you can spend money. Therefore, more money equals more demand. How does running the money through the gov't equate to having more money than doing it without running it through the gov't?? In your plan, we take money away from people and then give money to people. How about leaving money with people and taking the middle man (the gov't) out of the picture??
Who disagreed?When you have money, you can spend money.
If it's spent, yes. Which is why we need to get money into the hands of the poor, the people who currently can't save and will spend all of their income. Tax cuts for the rich, the people who already save quite a lot, will simply go straight into savings.Therefore, more money equals more demand.
We do? I never said that.In your plan, we take money away from people and then give money to people.
Yeah, "nonsense" refers to central banks/economists discussing a way to cause an increase in aggregate demand to fix our depressed demand.
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