Posted on 07/30/2010 12:24:16 PM PDT by rightwingintelligentsia
I have given up on macroeconomics.
Certainly it is a worthy field of study. But the science is too young, the systems it studies are too complex, and its practitioners are too often politicized for me to take its prescripts seriously in most policy debates.
Last week President Obama visited a new stimulus-funded electric-vehicle battery manufacturing facility in Michigan. The factory produces a product for which there is virtually no market, where worldwide manufacturing capacity already outpaces demand by a factor of three, and whose sales will depend on the government heavily subsidizing its customers.
Nobel prize-winning economist Paul Krugman often writes that only by authorizing much more of exactly this kind of government spending can we pull out of the current recession. Apparently, the way to economic growth is to have the operator of the Post Office, rather than private individuals, invest money. Hearing this, I can't come to any conclusion except that the field of macroeconomics is lost.
(Excerpt) Read more at forbes.com ...
That pretty well sums it up for Keynes theory concerning our current predicament. The Biblical seven years of plenty and seven years of want is an example of how Keynes theory is at least possible. However, we have not only used up all of the excess from the years of plenty, but we borrowed against it using the current years of want as collateral. To sum it up in the vernacular, "We're screwed."
That pretty well sums it up for Keynes theory concerning our current predicament. The Biblical seven years of plenty and seven years of want is an example of how Keynes theory is at least possible. However, we have not only used up all of the excess from the years of plenty, but we borrowed against it using the current years of want as collateral. To sum it up in the vernacular, "We're screwed."
Screwed, blued, and tattooed.
No that’s what I’m objecting to. They can’t move money through time. The money they spend in the here and now, they have to borrow in the here and now. Someone was using that money before the government borrowed it. The resources they divert are diverted from alternate uses in the present.
They do not have a time machine with which to bring resources from the future to the present.
In the sense that actions do not generally create instantaneous reactions in economics, shifts in the official figures (movements in time occur). In the sense that nothing occurs in a vacuum and the reaction will occur at some point, you are most correct.
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