Wednesday, May 22, 2013

Robert Vienneau — Our Rulers Do Not Know Why They Dislike Government Debt


Problem - % Wealthy Saying "Very Important" - Budget deficits - 87
I have an old explanation of this puzzle. Paul Krugman recently cited Michal Kalecki's explanationof why capitalists dislike increased government spending in depressions, even though such fiscal policy successfully dampens downswings in business activity. Krugman is not just depending on the capability of Kalecki's explanation to make sense of history long post-dating Kalecki's contribution. Krugman is also aware of the quantitative survey data I cite above.
Thoughts on Economics
Our Rulers Do Not Know Why They Dislike Government Debt
Robert Vienneau

Wingterspeak counters with Why people don't like deficits.

Again, it comes back to whether the issue is chiefly ignorance or interest.

3 comments:

F. Beard said...

There's no need to borrow to finance deficit spending as most MMT folks know. So why continue that source of confusion, misery and welfare for the rich?

Ramanan said...

"But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil."

-JMK, GT.

Roger Erickson said...

@Ramanan;
Keynes?

curious thing about humans; they respect their elders? too much?

Nothing that wasn't said before - even over 2000 years ago. But now it's even been said by an economic authority 80 years out of date?

Who knows what this will bring. :)

Much needed change, much too late?