Re: tax rebate

On Wed, 23 Jan 2008 13:09:47 -0700, boots <no@xxxxx> wrote:

Josh Hill <usereplyto@xxxxxxxxx> wrote:

I don't think anyone believes they can. Keynsian theory is in fact
said by some to have broken down during the stagflation of the 80's --
you weren't supposed to have both inflation and low economic growth at
the same time. But I don't think Keynsian or monetarist revenues can
be said to just hide problems. The economies of the industrial nations
have enjoyed robust growth ever since the end of the Great Depression,
with only mild cyclical depressions rather than huge swings. So
there's been real economic growth.

It sounds as if you're attributing the growth of industrial nations
since 1930 to monetary policy rather than innovation and production,
and if so I could not agree. At best monetary policy smooths out the
bumps, but it isn't capable of driving industry the way innovation and
production are, at least not as I view things.

Not the growth -- that would happen under any circumstances, on
average -- but as you say, smoothing out the bumps, which were
becoming increasingly volatile and in the case of the Great Depression
stuck for many years, until spending on World War II increased demand
sufficiently to put an end to it. Keynes believed the economy had
found a new equilibrium, one with high unemployment.

But now that we're in effect pouring unskilled laborers into the labor
pool from countries that are largely outside the realm of Keynsian and
monetarist policy? I don't know. We're skirting depression. And the
very measures that might push up the income of the worker in
industrial countries, such as tariffs, would tend to worsen the
depression, as they did in 1929.

I like living out here in the boondocks, for the most part. I'd like
it better if it wasn't necessary to forage in urban areas so often.
They're nasty enough now, in the type of depression I forsee they'll
be much worse.

Modern America is too suburban. It is far too dependent on the
automobile, on gasoline, on what one could call in general the "going
concern". That's fine as long as the concern keeps going. But when
things break down, and I mean really break down, when those hundred
square mile flat areas packed with houses for some reason no longer
support the sewage pumping stations that make up for their flatness,
there will be literally a world of ***.

Fortunately, I don't think things will break down. Not from oil
shortages or pollution or a depression, anyway, as opposed to war or
terrorism or some kind of terrible biological accident. I mean, even
with the massive dislocations of the 30's, things didn't break down in
the United States. They did in Germany, but that was partly because of
the massive reparations that Keynes had presciently warned against.
They contributed to the destruction of the Weimar Republic and the
rise of Hitler.


--
Josh

"My name is not Strangelove. I don't know about Strangelove. I'm not
interested in Strangelove. What else can I say? . . . Look, say it
three times more, and I throw you out of this office."

--Edward Teller
.

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