Deficit spending up until WWII was minimal at best, and can be mostly attributed to a deteriorating tax base as aggregate income was nearly cut in half by 1933. There is not a cookie cutter definition of Keynesian macro policy. Yes, deficit spending is essential, but closer observations must be made in order to dissect how income dynamics impact the tax base. Simply pointing to the existence of deficits (in and of themselves) does not support your argument.
No, you do not have a coherent argument, as it is riddled with misconceptions at every plausible turn.
Yeah. OK. :roll:
Let me add for those not so silly. Regarding The Depression, and spending. The last two years of Hoover pursued excessive spending, and the expansion of Government, which are just as much of a cause in sustaining the initial Depression as what FDR continued.
I figured the information answered it for me.
I guess not.
'Definition of 'Keynesian Economics'
An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.'
Read more: Keynesian Economics Definition | Investopedia
So, you are seriously suggesting that the New Deal was not an example of 'active government intervention in the marketplace and monetary policy'?
So a government increase in spending from 1930 until 1936 of roughly 150%, despite the fact that government revenues actually were lower in 1936 then in 1930...and you say that is not engaging in Keynesian policies?
Okaaaaaaay.
A near tripling of spending between FY1930 and FY1940 is minimal at best to you?
Once again, okaaaaaaay.
Many of FDR's relief programs weren't initiated until around 1935-1936. And in 1937, FDR had actually cut spending. And, there's also the fact that Keynes wrote letters to Roosevelt criticizing him for not doing enough spending.....
John Maynard Keynes said:But in a slump governmental Loan expenditure is the only sure means of securing quickly a rising output at rising prices. That is why a war has always caused intense industrial activity. In the past orthodox finance has regarded a war as the only legitimate excuse for creating employment by governmental expenditure. You, Mr President, having cast off such fetters, are free to engage in the interests of peace and prosperity the technique which hitherto has only been allowed to serve the purposes of war and destruction.
The level of increased spending was nowhere near the requisite to close the output gap. Typically those right of center tend to confuse the New Deal with Keynes. The General Theory was not publish until 1936, and the notion of running deficits in proportion of the output gap was not initiated until the U.S. enters WWII.
This is simply a matter of fact.
Yeah. OK. :roll:
Let me add for those not so silly. Regarding The Depression, and spending. The last two years of Hoover pursued excessive spending, and the expansion of Government, which are just as much of a cause in sustaining the initial Depression as what FDR continued.
The level of increased spending was nowhere near the requisite to close the output gap. Typically those right of center tend to confuse the New Deal with Keynes. The General Theory was not publish until 1936, and the notion of running deficits in proportion of the output gap was not initiated until the U.S. enters WWII.
This is simply a matter of fact.
Why allow the tax cuts to expire when we could just cut everything that makes American society not devolve us into a Somalia-like state?
You made an error in stating that the Banking Act of 1933 (a.k.a. Glass-Steagall) caused a lack of confidence in the banking system. First and foremost, the ridiculousness of the claim should be rather apparent given that nearly half of all banks in the U.S. failed by 1932. Secondly, FDIC insurance is responsible for bringing confidence back to depository institutions.
As stated earlier, your position stems from an incoherent understanding of contemporary finance.
... His actions with the banks when he first took office undermined confidence in them.
The day after FDR took the oath of office, he issued a proclamation calling Congress into a special session. Before it met, he proclaimed a national banking holiday--an action he had refused to endorse when Hoover suggested it three days earlier.
Invoking the Trading with the Enemy Act of 1917, Roosevelt declared that "all banking transactions shall be suspended." Banks were permitted to reopen only after case-by-case inspection and approval by the government, a procedure that dragged on for months. This action heightened the public's sense of crisis and allowed him to ignore traditional restraints on the power of the central government.
You have said that the New Deal is not an example of Keynesian economics
AND
that a budget deficit of 3.6% of GDP (what would today be $566 billion) is 'minimal'.
At least quote me, or correctly state what I posted, instead of just lying about it, and then criticizing me for something that I did not say.
Here, from an earlier link that I provided:
You are making stuff up.
The only idiotic thing we can do right now is NOT borrow more. In real terms, we are presently able to borrow at negative interest rates.
Your statement and link do not support your argument that the Banking Act of 1933 undermined confidence in banks.
Fitch Ratings reiterated on Thursday it would cut its sovereign credit rating for the United States next year if Washington cannot come to grips with its deficits and create a "credible" fiscal consolidation plan...
"The United States is the only country (of four major AAA-rated countries) which does not have a credible fiscal consolidation plan," and its debt-to-GDP ratio, or how much debt it has relative to the size of the economy, is expected to increase over the medium term, Ed Parker, sovereign ratings analyst, told a Fitch conference in New York.
Fitch Ratings has repeated its warning that it will cut the U.S. credit rating in 2013 if the U.S. fails to come up with a credible fiscal consolidation plan.
From Reuters:
U.S. rating faces 2013 cut if no credible plan: Fitch | Reuters
Interesting that they will decide after the elections. I guess they do not want the administration to be mad at them and ask some tough questions about how rating agencies get paid by the people they rate.
Their decision will be based on a number of significant decisions that will come up early next year.
So they are saying that they will downgrade if Obama is reelected and does what he promises, including a new stimulus program in 2013?
No, essentially they're saying they will downgrade if the teabagger Congress continues to refuse to negotiate, indicating that wer're in for at least another two years of ungovernable stupidity.
No, essentially they're saying they will downgrade if the teabagger Congress continues to refuse to negotiate, indicating that wer're in for at least another two years of ungovernable stupidity.
The problem with our Congress lies on both sides of the aisle since neither side is willing to budge on their Golden Calves and, in the last couple of decades, the word "compromise" has become a dirty word in the highly polarized politics plaguing our nation.
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