tag:blogger.com,1999:blog-1740670447258719504.post3592337647643314511..comments2024-03-27T03:00:27.024-04:00Comments on Facts & other stubborn things: Thoughts on Boettke?Evanhttp://www.blogger.com/profile/12259004160963531720noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-1740670447258719504.post-64643028537165431952011-12-22T23:32:01.347-05:002011-12-22T23:32:01.347-05:00Warren, you might want to check this post then...
...Warren, you might want to check this post then...<br /><br />http://www.amazon.com/review/R163XIB3OP7PS3/ref=cm_cr_rev_detmd_pl?ie=UTF8&cdForum=Fx27R023XRHHJRS&cdMsgNo=4&cdPage=1&asin=0121388506&store=books&cdSort=oldest&cdThread=Tx112Q5P6D82V47&cdMsgID=Mx2XTAIEX8B9ZN3#Mx2XTAIEX8B9ZN3Blue Aurorahttps://www.blogger.com/profile/02044362251868221897noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-76426917211213557062011-12-22T01:19:38.917-05:002011-12-22T01:19:38.917-05:00"I think the Keyes/Lerner split is overblown ..."I think the Keyes/Lerner split is overblown - overblown by Keynes himself no less than anyone else."<br /><br />Daniel,<br /><br />You might like <a href="http://community.middlebury.edu/~colander/articles/was_keynes_keynesian.pdf" rel="nofollow">this paper</a> I stumbled upon a few months ago re: Keynes and Lerner. Apparently Keynes ended up agreeing with Lerner on deficits and functional finance. So talk of a "split" on the issue is obviously overblown.Warrenhttps://www.blogger.com/profile/02228934208444865712noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-64506308732205509992011-12-21T05:13:10.718-05:002011-12-21T05:13:10.718-05:00At current levels of interest rates, deficits are ...At current levels of interest rates, deficits are not one bit a problem.<br /><br />I also disagree with certain Keynesians such as Brad DeLong who believe there is a need to solve a "long run deficit problem". No, there isn't. United States government has done just fine running on deficits for nearly 70 years since the end of World War II. Why believe it will be a problem by 20 years from now?<br /><br />A government can be simply run on central bank "purchases" of bonds, and once inflation needs to be corrected, the central bank may start selling the bonds on the market. Reserve requirements may also be raised to control inflation.<br /><br />There is no deficit crisis. There is a crisis of people not understanding how the fiscal and monetary system actually works, resulting in needless punishment through spending cuts and tax hikes.Prateek Sanjaynoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-66809252876191319642011-12-20T23:51:55.844-05:002011-12-20T23:51:55.844-05:00Daniel,
I would like to reverse the question and ...Daniel,<br /><br />I would like to reverse the question and ask 'why is running deficits not a problem'<br /><br />Leaving aside the loaded question of whether deficit-funded spending is beneficial or not and irrespective of whether "Keynesians" can be blamed for them surely running continuous deficits will have the following efects:<br /><br />- Increase the amount of taxation that must be raised each year just to pay the interest to the holders of the debt. How can these ever-expanding transfers from taxpayers to government debt holders not have an adverse effect on the economy?<br /><br />- The growing size of the debt must increase the risk of future debt crises that would likely be resolved either by default or by monetizing the debt (which would lead to inflation).robhttps://www.blogger.com/profile/04682517711551179057noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-50757682216293408682011-12-20T14:06:08.241-05:002011-12-20T14:06:08.241-05:00While I do think the Public Choice critique of mac...While I do think the Public Choice critique of macro is largely wrong, there does need to be an acknowledgement or the difficulties of running surpluses when the economy approached full employment. Democracy in Deficit makes it clear that under extreme economic duress, deficits are fine, and they are what we got throughout the 19th century. But like the 19th century, we need to be continually running surpluses when we aren't under extreme duress. I don't think it's too farfetched to connect the dots between the rise of Keynesian ideology and the difficulty of running a surplus in more recent decades when deficits are always seen as a positive in the short run.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-64548647961652335032011-12-20T09:47:05.601-05:002011-12-20T09:47:05.601-05:00Thanks for anticipating the point I was about to m...Thanks for anticipating the point I was about to make. I personally think Keynes would have been in favour of "balanced budget multipliers" that stemmed from the capital budget with a surplus. But in practice, we all know the odds of that happening, don't we?Blue Aurorahttps://www.blogger.com/profile/02044362251868221897noreply@blogger.com