Economically, is there really much difference between Keynesians and Suppl

[mot78]

Supply-Siders anymore? They both seem to be pro-deficit.

[kalian]

1. None IMHO....

its the classical "spend your way" out of a problem...
Keynes deal is basically that the State should spend, spend, spend.
Supply-side is: give tax breaks and other "incentives" to the
corporations and they will spend, spend, spend us out of the hole.

Either way...deficits arise.

[mot78]

3. I know Liberalism and Keynes used to be in synch, but that's changed

Especailly as the Democratic Party has become staunchly anti-deficit beginning in the early '90s with Clinton's election and Perot's bid in '92.

[kentuck]

2. I believe Keynesians believed that some deficit spending could....

stimulate the economy...but, unlike the supply-siders, they did not think there was an unlimited amount they could add to the deficit without adverse effects.

[Warpy]

18. They also targeted the spending

and didn't use it all to fatten the hoarding class.

[AP]

4. Not at all. I just heard Clinton talking about this. No Keynsian is

"pro-deficit." What they're "pro" is making investments in the infrastructure which return great dividends down the road when there are troubled times.

The opposing view seems to be, spend the government into such dire straits that it has no ability to make investments in the infrastructure.

Keynsians seem to believe that you sow the seeds of economic development in the working and middle class. Republicans believe that the best way to protect the wealth of the wealthy is to make it impossible for anyone without any wealth to do anything.

[mot78]

6. In that sense, both parties are Keynesian to a degree

[AP]

8. Huh? Republicans couldn't be farther from Keynes. The reason they're

running defecits is for the opposite reason. Keynes and Democrats believed that the government's business was creating wealth and happiness for its citizens. The Republicans want to destroy the ability of the government to do anything to prevent the flow of wealth to the wealthy (and in fact, that where the deficit spending is going -- it's just a transfer of money into the pockets of the wealthy who are doing nothing to earn it).

[mot78]

9. Nevermind

I misread your post. But like I said, Democrats are not really pure Keynesian since we've become more anti-deficit.

[sangh0]

11. No one is a pure Keynesian

nor should anyone be a pure Keynesian. He wasn't God. He made mistakes.

[AP]

15. That was one of the debates in the primary. Dean was anti-deficit.

Edwards, Lieberman, and Kerry believed in invensting in infrastructure in times of trouble. Can't remember if the others weighed in.

[sandnsea]

17. Depends on the economy

More or less. Run a deficit if the economy requires it.

Also, Keynesian does say that for every dollar spent it generates "X" dollars in the economy, so it's beneficial in the long run. But I think Democrats restrain that with a healthy does of kitchen budgeting because any housewife knows you can't spend all the money on Monday and expect there to be dinner on Friday.

[Trajan]

22. I think Keynes promoted deficit spending 'when necessary' ...

not as a matter of course when things are well ...

He 'primed the pump' by distributing national wealth at the demand side, creating demand for goods and services by helping the poor and middle class ... hence lifting the poor, middle and the wealthy ....

The only 'priming' the GOP knows is priming their own damned pumps: to HELL with the other citizens .... Supply Side is a farce: a sick joke .... They are only interested in helping themselves at the 'public trough' that they so deride ...

Funny how the GOP hates government spending because 'the government cannot do things efficiently', yet they can pay their friends in the corporate world TEN times as much (IE military contractors versus soldiers) to do the same things ....

The GOP hates government spending: unless THEY are on the receiving end: then they love it ....

Boy oh boy: are they on the receiving end now ....

[Alerter_]

5. good point, they are both pro-Fiat money and pro-Inflation

Fiat money (as opposed to currency based on a commodities like oil or gold) is inherently inflationary. Being Pro-Deficit means that you want to cause inflation. What it boils down to is that you want the democratic government to borrow money from the wealthy, and pay it back with interest. Public debt makes rich people, well, rich. Keynes and the supply siders are the same in that regard.

One of Clinton's crowning achievements was to bring down the deficit and begin paying off the public debt. He was so successful that Wall Street Journal started writing pro-big government spending articles :) Clinton wasn't afraid to raise taxes on rich people, to pay back what they spent.

[StopThief]

10. Supply-siders are not "pro-Inflation".

The theory has it that if you stimulate the economy by stimulating the suppliers of goods, you can do so without increasing inflation because the supply will keep up with demand.

Stimulating demand is inherently inflationary because it increases demand before the supply is increased to meet the increased demand.

[sangh0]

12. And fiat money is not "inherently inflationary"

Pay no attention to the man behind the curtain

[Alerter_]

13. neither are Keynesians, officially, but in reality they are

I guess I should have said the natural results of their policies are inflationary.

"stimulating the suppliers of goods" - that means subsidizing suppliers. That means more taxes for everyone else or deficits.

[The Magistrate]

23. The Problem With That, Mr. Thief

Is that no one in the business of making a profit by producing goods will ever produce more of them than necessary to meet the demand for those products. To do so would destroy the profit in the enterprise. Supply does not create demand, but rather demand creates supply. To increase supply above existing demand simply creates a "buyer's market" in which producers go broke; as they do, supply drops, usually to levels below existing demand, leading to a rise in prices for the now scarce commodity, and then rises once more as this draws new capital into that industry, restoring an equilibrium with demand....

[mot78]

7. I have another issue to debate about in this thread

What do you think of a Balanced Budget Amendment? I personally oppose it because it would choke off needed funding to some sectors (although it could still help fight pork) and we would have the same problems that cities and states have in cutting services.

[Alerter_]

14. actually I think it could be good in the long term, depending

Prohibiting the US federal government from borrowing money at interest would force some changes to our banking/Federal Reserve system that *could* be a good opportunity for America, if done correctly. Also a good possibility of screwing it up.

[sandnsea]

19. I oppose it

There are times we should run a deficit, like times of war or 9/11 type emergencies. I think the deficit ceiling was supposed to be to provide for those types of emergencies, but Bush blew that all to hell too. We're in a pickle, that's for sure.

[The Magistrate]

21. Indeed, Ma'am

Such a thing would be a straight-jacket, preventing the government at times from doing necessary and useful things. It is common to try and sell the idea of such an amendment by likening the government's finances to a household's, and stating that each household balances its budget, so why cannot the government do the same; however, no one ever bought a house, or even a new autmobile, without going into debt that, if reckoned as government accounts are, would show any household with a mortgage or a car loan to have a wildly unbalanced budget....

[The Magistrate]

16. It Is Not Quite The Right Question, Sir

The "supply side" nostrum winds up being in effect Keynesian, but only because the quacks peddling that nostrum are deluded concerning its effects. The "supply side" quacks predict that the reduction of taxes will not lead to deficiets, but will in fact generate so much economic activity that revenues will increase, and the government remain solvent despite an apparent initial loss of revenue. They maintain this preaching despite the tremendous deficiets that have always followed any attempt to put this quackery into action.

Keynsian theory holds that in stagnant economic conditions, for a government to spend more than it takes in can have a good effect, at least temporarily, by raising the amount of money in circulation, since such a gap will always be covered by one form or other of monetary creation, and an increase in the supply of money will lead to an increased tempo of economic activity. Pushed too far, of course, a serious inflation will result, but if done "just right", like the proper dose of a toxic medicine, the thing can be beneficial.

It is the gap between revenue and spending that is important, not how it is contrived: whether produced by an increase in spending or a decrease in revenues, it will have the same monetary effect. Thus, any attempt to enact a "supply side" policy will have the practical effect of engaging the Keynsian dynamic.

It is important to note that government debts, driven up too high, in accordance with whatever theory, tend towards the destruction of whatever currency they are denominated in. No government faced by overwhelming debt ever honestly pays off its creditors, but rather debases its currency and destroys the value of the debt its creditors hold. This is no better for people with only a little of that currency than it is for people with a lot of it....

[Alerter_]

20. excellent analysis, Magistrate

It seems to me no one really questions Keynes' idea that a temporary deficit can spur economic activity, and the majority that consider ourselves "fiscally conservative" aren't so inflexible to not be pragmatic. But we all realize that excess money creation will lead to inflation.

FDR was famous for trying any reasonable idea, and if it worked, great, if not, discard it and try again. That's the Democratic economic ideal.