Ben Bernanke's empty gun

[Owlet]

"In the World today, there are effectively 2 views on how governments should manage their money and their economies. The 2 views are:

1)Keynesian economics and
2)Austrian School of economics

The Keynesian view was created by British economists John Maynard Keynes in the 1930s. His central premise was that business cycles could be controlled through the use of fiscal and monetary policies. Just think, if economic growth is a little slower than needed simply cut interest rates a little, reduce taxes a little, and have your government spend a little more money than usual. The result? Stronger economic growth, more jobs, more investments and more tax revenues. Just like that – presto! Everything is fixed. This new approach to modern day economics made sense at the time and was obviously very appealing to everyone involved, after all how could you not like a win-win-win situation?

The view taken by the Austrian school however is rather quite dull, unexciting, uninteresting – especially to anyone with master of the universe ambitions. The rock solid foundation of the Austrian approach is based upon the belief that human behavior is so “complex” that entrusting important decisions to anyone with a brain (and agenda) is completely unwise. Instead, the Austrian school believes that the amount of money available in the system is the primary cause of most business cycles. In other words, do not try to control interest rates or spending levels, instead simply focus on ensuring there is a steady amount of money available for the real economy to function.

<snip>

The reason to be worried and alarmed is that Mr. Bernanke and other pro-Keynesian economists have taken Keynesian economics to the th degree. Yes, this approach has managed to boost growth – however the cumulative excesses from trying to boost growth has created the debt monster we are seeing today.

The problem with the Keynesian approach is that there is no re-set button available. What we mean by this is that after “juicing the goose” with interest rate cuts, lower taxes and increased spending – it becomes increasingly difficult to undo what was done.

Politicians, the economy and the stock market all become annoyingly complacent about any downside risk. If something goes wrong, Keynesian economics will always be there to bail us out.
Or will it? The real challenge with an addiction to Keynesian economics is what happens when there are no more interest rates to cut, no more taxes to cut, and no more spending to be found. The result is no more growth to be found anywhere – and worse still, this economic deal with the devil now has the World facing the reaper."

[WhiteTara]

1. We haven't tried the spending part of the Kenesian

model. Just the other 2. The minute the spending part started to work, the GOP (Greedy Old Pigs) put up the big halt. So, once we find out what happens when we spend what we need to spend, we'll see what kind of a reset button is needed.

[phantom power]

2. wow, an investment company making bogus arguments for more free money to play with...

nobody could have predicted that

:eyes: