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The Fallacy That Government Creates Jobs

hypocritexposer

Well-known member
In part, this is a debate about Keynesian economics, which is the theory that the economy can be boosted if the government borrows money and then gives it to people so they will spend it. This supposedly "primes the pump" as the money circulates through the economy. Keynesian theory sounds good, and it would be nice if it made sense, but it has a rather glaring logical fallacy. It overlooks the fact that, in the real world, government can't inject money into the economy without first taking money out of the economy. More specifically, the theory only looks at one-half of the equation — the part where government puts money in the economy's right pocket. But where does the government get that money? It borrows it, which means it comes out of the economy's left pocket. There is no increase in what Keynesians refer to as aggregate demand. Keynesianism doesn't boost national income, it merely redistributes it. The pie is sliced differently, but it's not any bigger.

http://www.cato.org/pub_display.php?pub_id=9825
 

Tex

Well-known member
hypocritexposer said:
In part, this is a debate about Keynesian economics, which is the theory that the economy can be boosted if the government borrows money and then gives it to people so they will spend it. This supposedly "primes the pump" as the money circulates through the economy. Keynesian theory sounds good, and it would be nice if it made sense, but it has a rather glaring logical fallacy. It overlooks the fact that, in the real world, government can't inject money into the economy without first taking money out of the economy. More specifically, the theory only looks at one-half of the equation — the part where government puts money in the economy's right pocket. But where does the government get that money? It borrows it, which means it comes out of the economy's left pocket. There is no increase in what Keynesians refer to as aggregate demand. Keynesianism doesn't boost national income, it merely redistributes it. The pie is sliced differently, but it's not any bigger.

http://www.cato.org/pub_display.php?pub_id=9825

Yes, this is correct. (I didn't read the whole article, just the clip above). There has been a concentration of wealth and it may have hit the threshold where it is counter productive to the economy. I have said this could be a problem just as it is in Mexico.

When government (republicans) veer toward big business at the expense of everyone and everything else, the balance in the economy and the concentration of wealth can be counter productive to the economy.

Recently Mexico has had the accolade of having the wealthiest man in the world. When a very few control the wealth in the country, and the influence the political system to turn justice into "just us", the economy as a whole suffers. We have had that in the U.S. with the Congress and the courts believing that the lowest price is the god of an economy. In a good economy, the lowest price isn't the ultimate goal, it is the balance between the suppliers and the consumers (supply and demand). When big business controls the supply chains so much that they are able to suppress wages (in the U.S. via imports of goods and labor) and the price of goods while having huge trade deficits, the economy at home suffers. Who has been the beneficiary? With trade deficits and foreign countries like communist China being able to buy U.S. t bills with their positive trade balance, it has looked like the interest rates have been subsidized by the very people who have been profiting from selling out the suppliers within the country and hollowing out the economy.

I am all for trade but we must, on average, have a balance of trade. We have not for some time. The wealth in the country needs to be redistributed not because rich people are evil, but because they have been able to change the rules to benefit themselves over everyone else. In a good capitalist economy, everyone should have a fair chance at the market share and politicians should stop selling advantages to campaign contributors. It messes up the distribution of wealth and messes up the economy as it has here and in Mexico.
 

Tex

Well-known member
Glenn Greenwald talked with Bill Moyers Friday night about the rule of law and how it was perverted by the Bush administration:

BILL MOYERS: To be fair, you make a strong case in here that we have to stand up to extremism but that we have to protect our own constitutional principles while we do. And as I read both of these books, it is the sense that out of this Manichean view there came this whole notion that you say is alien to America, this unitary executive powers of the presidency. Have I stated that right?

GLENN GREENWALD: You have. Let’s just quickly describe in the most dispassionate terms, as few of euphemisms, as possible, where we are and what has happened over the last eight years. We have a law in place that says it is a felony offense punishable by five years in prison or a $10,000 fine to eavesdrop on American citizens without warrants. We have laws in place that say that it is a felony punishable by decades in prison to subject detainees in our custody to treatment that violates the Geneva Conventions or that is inhumane or coercive.

We know that the president and his top aides have violated these laws. The facts are indisputable that they’ve done so. And yet as a country, as a political class, we’re deciding basically in unison that the president and our highest political officials are free to break the most serious laws that we have, that our citizens have enacted, with complete impunity, without consequences, without being held accountable under the law.

And when you juxtapose that with the fact that we are a country that has probably the most merciless criminal justice system on the planet when it comes to ordinary Americans. We imprison more of our population than any country in the world. We have less than five percent of the world’s population. And yet 25 percent almost of prisoners worldwide are inside the United States.

What you have is a two-tiered system of justice where ordinary Americans are subjected to the most merciless criminal justice system in the world. They break the law. The full weight of the criminal justice system comes crashing down upon them. But our political class, the same elites who have imposed that incredibly harsh framework on ordinary Americans, have essentially exempted themselves and the leaders of that political class from the law.

They have license to break the law. That’s what we’re deciding now as we say George Bush and his top advisors shouldn’t be investigated let alone prosecuted for the laws that we know that they’ve broken. And I can’t think of anything more damaging to our country because the rule of law is the lynchpin of everything we have.



see also:


http://www.endgame.org/primer-wealth.html
 

Steve

Well-known member
They have license to break the law. That’s what we’re deciding now as we say George Bush and his top advisors shouldn’t be investigated let alone prosecuted for the laws that we know that they’ve broken.

I have no problem prosecuting Bush or any of his advisers if they actually broke any laws...

but I have a problem with "investigations" with a focus and a reason that never find any broken laws and end up persecuting an adviser for perjury because he "misspoke",, or was a bit over protective...

the Scooter Libby, Bill Clinton, or Martha Stewart cases comes to mind... neither broke any laws.... but were both found to have perjured in testimony they gave.. but the intent of each investigation was not to find a potential lier... so it is a waste of time...and tax money..

and with all the press scrutiny and liberal hatred.. if there was a case against Bush... he would have already been impeached..
 
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