Friday, June 10, 2011

The Austrian School responds to Dr. Galbraith

Austrian School economist Robert P. Murphy has written a response to Dr. Galbraith's previous American Conservative article. It's 'good, cold douche' time as Murphy channels Joseph Schumpeter and Andrew Mellon. An interesting side note: Murphy works for the Institute of Energy Research, a think tank that according to Greenpeace involves "Thomas Pyle, a former Koch and oil-industry lobbyist, is the President of IER and the American Energy Alliance, the 501c4 counterpart to IER" and "$175,000 received from Koch foundations 2005-2009 [Total Koch foundation grants 1997-2009: $235,000]" (source).




An excerpt: "But who cares if the dollar value of “Gross Domestic Product” goes down? If prices fall even more, then Americans’ standard of living goes up. For example, if the Tea Party activists actually held Republicans’ feet to the fire and Uncle Sam didn’t raise the debt ceiling, then the government would have to slash $750 billion or so from this year’s spending to avoid default on the existing debt".

"That would mean that there was a sudden loss of $750 billion in income to various people in the economy. A large part of it would probably be made up by income generated in the private sector, as the government’s deficit disappeared and people expected lower future tax burdens. But even if it didn’t, so what? The quantity of skilled workers, raw materials, and machine tools wouldn’t decrease just because Uncle Sam started living within his means. After prices adjusted downward, Americans would find they could buy more with their lower incomes".

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