Interesting Economics That I Learned-Big Government is Better

  • #26
selfAdjoint
Staff Emeritus
Gold Member
Dearly Missed
6,786
7
gravenewworld said:
Thats the point, running up deficit in hopes of future returns. Remember when the government spends, the effect this can have on income in the future is multiplied by several factors. As income rises government tax receipts will increase. However, I will be the first to say that running up extremely large deficits is also bad (for reasons I will not discuss here). Well coordinated Fiscal AND monetary policy is the key. Trying to keep a balanced budget during a recession only prolongs it and makes it worse.
I would say the major premise here is silly, except for recent history. Everything was copacetic and we grew like crazy UNTIL we balanced the budget, up till then we had been growing on the huge debt from the Reagan administration. As soon as we balanced the budget evrything went to hell, the dot com bubble burst (and who's to say what forces poked the needle into it), and Dubya was elected and all. Keynesian debt forever! :rofl:
 
Last edited:
  • #27
1,104
25
When Keynes was asked how a government should respond to the problems arising from large govt deficits in the long run he responded "Who cares I'll be dead."
 

Related Threads for: Interesting Economics That I Learned-Big Government is Better

  • Last Post
Replies
2
Views
5K
Replies
5
Views
8K
Replies
2
Views
3K
  • Last Post
Replies
14
Views
6K
Replies
31
Views
7K
  • Last Post
2
Replies
49
Views
11K
Top