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[–] alalzia ago 

Keynesianism in a world where supply exceeds demand ?

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[–] novictim [S] 0 points 1 point (+1|-0) ago 

Why do we study economics and what is the function of an economy? Who should the economy serve?

The answer to that in a democracy is that the economy is meant to serve the voters and we measure that service by looking at per capita GDP. When that goes up, the wealth of the citizenry as a whole goes up. That is what we strive for.

Supply side economics argued that reducing the taxes on the producers and actually paying benefits to the producers at times would drive up per capita GDP growth. But the facts are that that is not what has happened. INstead, the GDP growth has stalled and, just as bad, wealth inequality has increased. That is a lose lose for the system but not for the lucky few that benefited.

Keynesian economics, contrary to Kenyes-bashers who universally either don't understand what Keynes recommended or who have an ulterior motive driving them from being truthful and honest, is not one thing. It is an approach. It is not a "tax the rich" scheme. It not a socialist takeover of capitalism.

Monetary policy as we see being used now in the absence of FISCAL POLICY is NOT Keynesian economics. Increasing taxes and raising interest rates in a booming economy and paying down debt is part of a Keynesian approach. Tell me, when was the last time you saw that in action??

Running negative trade deficits rather than positive ones meaning that you sell more abroad than you buy...when did you see that last? Seriously, if you are thinking that Zero Hedge has any clue as to what Keynesian economics is then you are mistaken. I have personally argued with williambanzai7, the cartoonist who bashes Keynes, on this and he even admits that this is a meme, not a real attack on Keynesian economics! Ben Bernankeand and Alan Greenspan are NOT Keynesian and they cannot influence Fiscal Policy!

The one fundamental principle of Keynesian approach is that demand should drive supply. Demand side economics is what grew the country and created the middleclass. Youcan deny this but be honest about it. This is not religion.

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[–] alalzia 0 points 1 point (+1|-0) ago  (edited ago)

Keynesian economics worked well when USA was the only industrialized nation not ruined by war , today everyone and his mother has industries that can cover demand multiple times. I would be the last person to defend neoliberalism yet we all see how producing goods does not generate any profit and the interest has shifted to hot air selling financial markets. Global GDP is like 10% of the derivatives market and this says a lot.

Booming economies today are products of creative accounting , here in Europe all banks are bust (with UK's ones in the worst condition) the ECB is QEing sink-holes and every morning we wake up wondering which new financial institution we have bought .

The problem is political rather than economic, capitalism can not work in controlled/rigged markets (LIBOR ?) in the same way you cannot have communism without the dissolution of the state (fucking Engels) and since the state is the mechanism that drives protectionism and corruption neither capitalism benefits from its existence . So here is the question : do we keep the state around and move into completely new economics or do we dissolve it and let communities do as they like ?

...and about the zero hedge HAHA .