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Thread: Day One

  1. #92
    Join Date
    Jul 2010
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    Quote Originally Posted by printer2 View Post
    But Keynesian said government should put some of what they collect every year away so when things get bad they can pull it out and smooth over the bumps. He did not suggest borrowing when times were bad. But how well would that go over? Democrats collecting more than the government spends? How could they say no to worthy programs to help the needy while they have cash sitting around?

    Also do you think Republicans could tell their supporters that they are going to take more tax from you than we need?

    The strange thing was Canada was in that position. We had a Liberal government that budgeted for a certain amount and 'Surprise' because they were so good managers they ended up with surpluses year after year. We all knew they were not that good at managing but were taking more in tax. Mind you we were not too upset with it as they were using half of it to pay down the debt and half sat around in a fund in case it was needed.

    Well when the Conservatives got in they thought the tax payer was a better judge of what to do with their money so they reduced taxes, used up the built up surpluses and only took in as much as the government needed. When the downturn came they found their take of tax dollars went down , they ended up borrowing money paying for programs to keep the economy going.

    Well it seemed to work as we are doing ok but we are still running deficits and they think we will for the next five years. Now if they left the taxes where they were (Polls said the majority were not really calling for lower taxes, we were in good times, but wanted services to be kept up.) and the surpluses not dwindled away they could have used the surplus for make work projects and maybe dropped the tax rate a point or two to help the economy.
    Keynes did suggest deficit spending during bad times. Point is made and agreed that preperation should be made for those times.

    Government deficit spending is a central point of controversy in economics, with prominent economists holding differing views.[1] The mainstream economics position is that deficit spending is desirable and necessary as part of countercyclical fiscal policy, but that there should not be a structural deficit: in an economic slump, government should run deficits, to compensate for the shortfall in aggregate demand, but should run corresponding surpluses in boom times so that there is no net deficit over an economic cycle – a cyclical deficit only. This is derived from Keynesian economics, and has been the mainstream economics view (in the Anglo-Saxon world especially) since Keynesian economics was developed and largely accepted in the Great Depression in the 1930s.

    http://en.wikipedia.org/wiki/Deficit_spending

    I have never argued for structural deficits. I have maintained that now is not the time for drastic cuts in spending. I believe we can cut or move money away from the defense dept.

  2. #93
    Join Date
    Feb 2009
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    Canada
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    Quote Originally Posted by pageyjim View Post
    Keynes did suggest deficit spending during bad times. Point is made and agreed that preperation should be made for those times.

    Government deficit spending is a central point of controversy in economics, with prominent economists holding differing views.[1] The mainstream economics position is that deficit spending is desirable and necessary as part of countercyclical fiscal policy, but that there should not be a structural deficit: in an economic slump, government should run deficits, to compensate for the shortfall in aggregate demand, but should run corresponding surpluses in boom times so that there is no net deficit over an economic cycle a cyclical deficit only. This is derived from Keynesian economics, and has been the mainstream economics view (in the Anglo-Saxon world especially) since Keynesian economics was developed and largely accepted in the Great Depression in the 1930s.

    http://en.wikipedia.org/wiki/Deficit_spending

    I have never argued for structural deficits. I have maintained that now is not the time for drastic cuts in spending. I believe we can cut or move money away from the defense dept.
    You are right, was late in the night and my memory was kind of foggy. My main point was that he said the government should put something aside in good times to get through the bad times. Kind of like what the Chinese are doing. The export economy is not doing as well right now so they threw a lot of money they had saved up at building their infrastructure. They have kept their economy humming and are thinking of scaling back because inflation is creeping in.

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