Posted on 05/11/2013 7:13:12 AM PDT by RoosterRedux
I think that’s peanuts compared to the notion government can tax and spend us into prosperity (Keynes).
Which is worse: to be an invaded, possibly conquered, people... or to have a government which forces either (A) widespread theft, or (B) every employer to help perpetrate fraud upon its employees?
It's an either-or depending on when the withholding occurs in (a) it occurs when the money is the employee's, and in (b)when the money is still the employer's.
(a) -- Because the money was taken, by threat of force, before it entered his hand.
(b) -- Because the employer is not paying the agreed upon wage.
Keynes model wouldn't work if the people had to pay the government directly and explicitly -- because in that case it's owned money... compare that to the mentality that people have WRT tax-returns (i.e. that the government is giving them money).
That's correct. Furthermore, the implicit Euro backing of Greek debt creates a carry trade. The big financial institutions borrow Yen or dollars at ridiculously low rates and "invest" in Greek bonds at higher rates. It is of course not an investment at all but a speculative bubble destined to collapse. Next the Greek government spends their new found windfall on socialist waste. They also call that "investment" but it is just transfer to the wealthy and some to the not-so-wealthy to make it look properly socialist.
The next step is 100% inevitable, Greek bonds plunge as the "investors" suddenly realize that a basket case has no hope of paying them back. The plunge is greatly speeded and enhanced by threats of haircuts, etc. Finally German taxpayers get suckered in to paying the old bonds. They do a little pretend austerity for a while. After a long enough time the Greek bonds are considered safe enough for another round of carry trade.
The effect of carry trade bubbles and crashes on any smaller economy is catastrophic. Business cannot invest, taxes rise and the people demand even more socialism.
Ask the Poles or the Filipinos.
Anybody who can seriously compare being conquered by an Axis power to our present political problems should not themselves be taken seriously.
Quote:
// “The economic situation is worsening from month to month,” he wrote on his Left party blog. “unemployment has reached a level that puts democratic structures ever more in doubt.” //
Destroying democratic structures was the goal. I read that as glee.
I think we’ll just have to disagree on which is the original sin. I agree that there would be a lot less tolerance of what the government does if people had to write checks for it (rap on Friedman), but the fact the government does these things in the first place is because people have this notion that government can “smooth out” the business cycle with spending (rap on Keynes). Which came first, the chicken or the egg?
I’m not in the mood for getting into a discussion of who sucks more.
Because, WRT tyranny, "it can't happen here"?
Honestly, comments like that make me think you haven't paid any attention to the immigrants from communist/socialist countries... or those that survived WWII... when they were talking about their unease at the current administration.
Alas, the EU isn’t on the verge of collapse. Their economy is weak because the price of crude oil has been engineered higher by OPEC, and their good friends and close allies, the “greens” like Al Gore.
Thanks RoosterRedux.
The only reason that the Euro hasn't crashed and burned (yet) is that every major central bank in the world is drinking the pseudo-Keynesian, Krugmanian Kool-Aid; to wit, that creating money out of thin air is the ONLY way to save the big banks (why do they require saving, hmm?) and keep "growth" (retch, choke) going. They're all playing that game we played as kids, "Pass the Trash" or "Screw Your Buddy", but with untold trillions at stake instead of pennies.
Thus, the mad rush to print money, thence to inflate -- the irresponsible debtor governments' universal, all-purpose solution to reduce (haha) or get out of (chortle!) debt.
The only remaining point of discussion is the precise timing of when this corrupt, Goldbergian system blows. Pays your money, takes your choice.
I guess you can just keep scrolling down.
We had the "US corporations don't pay too many taxes thread," the "Milton Friedman was a Keynesian thread," and the weekly "let's raise taxes on ourselves as individuals, in order to increase prosperity" thread, among others.
Krugman and Keynes march on. Might be a good time to re-post those two fabulous rap videos - Keynes vs. Hayek. Now that was great stuff.
There were also "massive" incentives not to engage in overspending and overborrowing: fiscal stability of their countries being only one. You are excusing totally irresponsible behavior because the opportunity was there.
The answer is not to expect people tp be nobly self-denying and ignore the incentives, it is to avoid providing the incentives in the first place.
The Germans and the Dutch, for example, are not self-denying. They both have prosperous and growing economies. Their citizens have the highest standards of living on the Continent. They had the same, as you call them, incentives.
They simply aren't corrupt and opportunistic enough to avail themselves of them.
Multiple currencies act as a kind of free-market check and balance. Nobody would have lent the Greeks all this money if they were going to be paid back in drachma, subject to devaluation if too much was printed. Being paid back in euros backed by Germany, no problem!
The single currency -- had its guiding directives been followed -- was designed to impose fiscal discipline on the profligate states. It could have, much as gold functioned as a global currency at the end of the 19th century.
What you are suggesting, a return to national currencies, will only re-create the incentives to overspend. Except this time, they'll do it through inflation rather than borrowing. It's still irresponsible and it's still wrong.
Politicians always and under any monetary regime have the incentive to overspend. It's called re-election. The Euro didn't create that.
Point taken. At least Friedman admitted his mistake. Unlike the author to the thread I posted, who doesn’t mention it at all.
The article is confused as to why so many European countries are falling apart; it's either the Euro, trade deficits, or it's tax'n'spending that's the root-cause bad idea. Hint: the Euro's not the problem, the trade deficit's not the problem, it's tax'n'spending. Austria has an unemployment rate of around 4%. They also have a huge 'trade deficit'. What they don't have is tax'n'spending and instead of Keynes they got Hayak.
"James Lewis" is a alias and there's no bio on the guy (gal?) and my guess is he/she probably never took Econ101. My reasoning is Lewis is an idiot to think that devaluing the currency can help the economy by boosting exports. Reality is that exchange rates don't affect markets, it's markets that control exchange rates.
Lewis really needs to understand that government's not the solution, it's the problem.
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