Best Thread Keynes Vs. Hayek

[new_trader]

It has nothing to do with ego and everything to do with understanding what you are talking about. Anyone who thinks that inflation is controlled by taxes is simply misguided and wrong and they especially shouldn’t be trading currencies.

Anyone who thinks that low interest rates and high inflation doesn’t inflict misery and suffering on vast numbers of the population is wrong. History has proven this time and time again.

 

[new_trader]

If HollyWood says it - then it must be true...

They had a similar guy on news night last night who was bragging about big government gone crazy.

The news reporter said - Few years back you were saying Governments should not interfere with regulating financial markets and look where we are today. Where has it gone all wrong...


Plonker side stepped question - he said self regulation wasn't applied far and wide enough...

Funny geezer he was... Wrote a book about it... so I guess he knows what his talking about if its in print.

I think the biggest irony is that the U.K and the U.S.A are dropping humanitarian bombs on Libya to free the people from an oppressive Government.

 

[Atilla]

It has nothing to do with ego and everything to do with understanding what you are talking about. Anyone who thinks that inflation is controlled by taxes is simply misguided and wrong and they especially shouldn’t be trading currencies.

Anyone who thinks that low interest rates and high inflation doesn’t inflict misery and suffering on vast numbers of the population is wrong. History has proven this time and time again.

NT for the record - I said one needed Demand side fiscal and Supply side monetary controls. Depending on how you wish to influence the economy.

You do not give tax cuts if you can't afford them.

You give tax cuts when you can afford them.


How more simple can it get? Turn up your dimmer switch dude...

 

[new_trader]

NT for the record - I said one needed Demand side fiscal and Supply side monetary controls. Depending on how you wish to influence the economy.

You do not give tax cuts if you can't afford them.

You give tax cuts when you can afford them.


How more simple can it get? Turn up your dimmer switch dude...

Dude, open up an economic textbook and do your research. You don't know what you are talking about. It's difficult to agree or disagree with an opinion that doesn't even make sense.

This is what you wrote earlier:

1. Raise taxes - demand side management to curb inflation
2. Cut interest rates - supply side to stimulate investment and production

In other words you still think interest rates are supply side, and taxes are demand side.

I will explain, again:

Changes in taxation are SUPPLY SIDE policies. Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices. Typical policy recommendations of supply-side economics are lower marginal tax rates and less regulation


On another point.

The importance of SOUND MONEY.

 

[Pat494]

The left wing haven't really rated saving money, possibly coming from the poorer end of the financial spectrum they had little or none to save. What they really were wise to was spending everything they could lay their hands on. So when they come to power, when the electorate is tired of conservatism, they spend everything there is plus what they can beg, borrow or tax.

 

[Shakone]

The left wing haven't really rated saving money, possibly coming from the poorer end of the financial spectrum they had little or none to save. What they really were wise to was spending everything they could lay their hands on. So when they come to power, when the electorate is tired of conservatism, they spend everything there is plus what they can beg, borrow or tax.

I don't think this is a valid point as

1) many of the high positioned left-wing labour politicians in recent times didn't come from poor backgrounds, and plenty to save

2) poor people in China don't go out and spend all their money, they save it. And my own experience of coming from a relatively poor background, is that what little there is, is saved. Because it has MORE value not less. Utility theory.

 

[Atilla]

Dude, open up an economic textbook and do your research. You don't know what you are talking about. It's difficult to agree or disagree with an opinion that doesn't even make sense.

This is what you wrote earlier:



In other words you still think interest rates are supply side, and taxes are demand side.

I've read this...
http://www.economicsalevel.co.uk/Revision sheets/Fiscal ADAS.DOC


Take note:
2) Demand Side Fiscal Policy

As noted, the aim here is to stabilise the overall level of aggregate demand, trying to prevent the appearance of inflationary (too much demand) and deflationary (too little demand) gaps. The policy works at two levels, automatic and discretionary.



Mate you can pick what ever you want if you can't get your head round the basics common sense there is little or no hope for you. I understand your perspective but reject it as a solution to our current dillema. Period. The rest - time will determine.

1. Raise taxation (PAYE obviously and not Corporation Tax) perhaps not obvious to some. Also tax excessive bonus culture as part of PAYE. Companies will then direct monies on investment and expansion rather than rewarding the few. Got it? Simple enough for you?

2. Cut interest rates - to make RoI more attractive.

3. For you inflation > interest rates.

Hey presto debt paid off in double quick time.



To
1. Cut taxes - when we can't afford them as big G is in debt
2. Raise interest rates - to burn business and homeowners to benefit savers

Will screw the whole of UK recovery for now and considerable period in the future.
You are about as daft and illogical as one can possibly be obtuse. This policy will only benefit the few who are already considerably well off and penalise the many.

Don't mean to be rude but either you are very clueless to put it politely or you are an absolute selfish *******?


Simple really.

 

[Shakone]

I've read this...
http://www.economicsalevel.co.uk/Revision sheets/Fiscal ADAS.DOC


Take note:
2) Demand Side Fiscal Policy

As noted, the aim here is to stabilise the overall level of aggregate demand, trying to prevent the appearance of inflationary (too much demand) and deflationary (too little demand) gaps. The policy works at two levels, automatic and discretionary.



Mate you can pick what ever you want if you can't get your head round the basics common sense there is little or no hope for you. I understand your perspective but reject it as a solution to our current dillema. Period. The rest - time will determine.

1. Raise taxation (PAYE obviously and not Corporation Tax) perhaps not obvious to some. Also tax excessive bonus culture as part of PAYE. Companies will then direct monies on investment and expansion rather than rewarding the few. Got it? Simple enough for you?

2. Cut interest rates

3. For you inflation > interest rates.

Hey presto debt paid off in double quick time.



To
1. Cut taxes - when we can't afford them as big G is in debt
2. Raise interest rates - to burn business and homeowners to benefit savers

Will screw the whole of UK recovery for now and considerable period in the future.
You are about as daft and illogical as one can possibly be obtuse. This policy will only benefit the few who are already considerably well off and penalise the many.

Don't mean to be rude but either you are very clueless to put it politely or you are an absolute selfish *******?


Simple really.

I don't know why a disagreement about policy needs to result in insults about how daft this or that person is. I'm not suggesting you're the only one doing it Atilla, but it's not pertinent to the point, and detracts from it in your case.

It's not simple. If you think it is, you're wrong. However, as you point out, there are some basic common sense principles which should apply. In my, (and others opinion), what you're suggesting is not common sense principle, although it is thought to be the solution by many people. I'd suggest you do watch some of the programmes suggested, particularly the one involving Hong Kong where government income increased and industry boomed from tax cuts, not increases.

You're looking at it on one level. You say cutting taxes we can't afford because of the debt. Paying off the debt relates to how much the government receives in taxes yes, but how much the government receives in taxes depends on how much people spend, and how much people earn. If you reduce taxes, people are inclined to work more, companies employ more, and people spend more. Which outweighs the other? It's not clear cut, but I think reducing taxes will over a period increase the revenue to pay off the debt.

There are people I know, who would work, but because of taxes and the benefit system, have no incentive to work, because if they worked a 40 hour week, they would be only marginally better off than if they just received benefits and worked for 0 hours. The choice is obvious. How do try to mollify this problem? Well you can cut benefits, cut taxes on income, or both. Raising taxes on income will make an already bad situation, worse.

 

[Atilla]

I don't know why a disagreement about policy needs to result in insults about how daft this or that person is. I'm not suggesting you're the only one doing it Atilla, but it's not pertinent to the point, and detracts from it in your case.Nothing serious Shakone, I like NT honest. I'm seldom offended and I doubt he is either. You selfish ******* is a common phrase. Wouldn't cry about it.

It's not simple. If you think it is, you're wrong. However, as you point out, there are some basic common sense principles which should apply. In my, (and others opinion), what you're suggesting is not common sense principle, although it is thought to be the solution by many people. I'd suggest you do watch some of the programmes suggested, particularly the one involving Hong Kong where government income increased and industry boomed from tax cuts, not increases. When? Were they in recession coming out or in a boom going into high unemployment and a recession. Where you are on the economic cycle impacts revenue. This concept of low tax high revenue is not what it is made up to be. Look at USA???

You're looking at it on one level. You say cutting taxes we can't afford because of the debt. Paying off the debt relates to how much the government receives in taxes yes, but how much the government receives in taxes depends on how much people spend, and how much people earn. If you reduce taxes, people are inclined to work more, companies employ more, and people spend more. Which outweighs the other? It's not clear cut, but I think reducing taxes will over a period increase the revenue to pay off the debt.
There is a time lag between tax cuts / raises and its transfer into real economy. ie Same as QE.

There are people I know, who would work, but because of taxes and the benefit system, have no incentive to work, because if they worked a 40 hour week, they would be only marginally better off than if they just received benefits and worked for 0 hours. The choice is obvious. How do try to mollify this problem? Well you can cut benefits, cut taxes on income, or both. Raising taxes on income will make an already bad situation, worse. This has been known for decades as the poverty trap. Not a tax issue but more of minimum wage and benefits.

Good post to put us in check thank you Shakone. Top man...

 

[counter_violent]

Good post to put us in check thank you Shakone. Top man...

He is only repeating what we have all been going on about for months...anyway, the biggest favour you could do is to watch those vids and then come back and explain why we should like all this big govt and state. The East must be laughing their little cocks off at all the nonsense coming out of the West.

Brought to you from the school of CVeconomics

 

[new_trader]

I've read this...
http://www.economicsalevel.co.uk/Revision sheets/Fiscal ADAS.DOC


Take note:
2) Demand Side Fiscal Policy

As noted, the aim here is to stabilise the overall level of aggregate demand, trying to prevent the appearance of inflationary (too much demand) and deflationary (too little demand) gaps. The policy works at two levels, automatic and discretionary.



Mate you can pick what ever you want if you can't get your head round the basics common sense there is little or no hope for you. I understand your perspective but reject it as a solution to our current dillema. Period. The rest - time will determine.

1. Raise taxation (PAYE obviously and not Corporation Tax) perhaps not obvious to some. Also tax excessive bonus culture as part of PAYE. Companies will then direct monies on investment and expansion rather than rewarding the few. Got it? Simple enough for you?

2. Cut interest rates - to make RoI more attractive.

3. For you inflation > interest rates.

Hey presto debt paid off in double quick time.



To
1. Cut taxes - when we can't afford them as big G is in debt
2. Raise interest rates - to burn business and homeowners to benefit savers

Will screw the whole of UK recovery for now and considerable period in the future.
You are about as daft and illogical as one can possibly be obtuse. This policy will only benefit the few who are already considerably well off and penalise the many.

Don't mean to be rude but either you are very clueless to put it politely or you are an absolute selfish *******?


Simple really.

I can see the problem now. Your entire argument is based on that document. I read through it and even did a search for the term 'money supply' and 'debasement' and no matches were found. Could this be the reason the U.K is in a mess? Nobody understands (or is taught) the real meaning of inflation and the consequences?

I read your document now do me a favour and read this:

http://www.saveoursavers.co.uk/why-save/for-the-economy/

History books are filled with disasters and catastrophes. Non-events are rarely written about. The PIIGS are in trouble because of too much debt, the UK is in trouble because of too much debt and the US is in trouble because of too much debt. Does anyone here think that the recent global financial crisis and subsequent recurring problems are the result of too much savings or because the Government followed a sound money policy?

Governments like inflationary policies because it allows them to live beyond their means and without any need to run a surplus, just print money more when you run out. This is why they promote ‘demand’ side policies and, I can only suppose, it’s why the educational system is skewed to favour it. Consumers are encouraged to borrow and spend as this leads to economic growth, so we are brainwashed to believe.

I can find countless examples in the past where economies have been ruined due to inflationary (debasement) policies perused by governments. I would appreciate if anyone can anyone cite an example in History where an economy has failed because it ran a surplus or a sound money policy. Maybe post a link.

 

[Atilla]

I can see the problem now. Your entire argument is based on that document. I read through it and even did a search for the term 'money supply' and 'debasement' and no matches were found. Could this be the reason the U.K is in a mess? Nobody understands (or is taught) the real meaning of inflation and the consequences? No my entire arguement is based on studying commerce and economics from the age of 14 onwards pretty much. I only linked that document to show you fiscal policy has a demand side management as well as interest rate monetary policy a supply side.

Crux of my arguement is that you can't and should not have one without the other. Why deprive one self of a management controlling tool?

How the socio-politics of the generation applies the economic theory is where the BS comes in.

It is quite acceptable - as Shakone pointed out to cut tax in a recession and raise it in a boom. But it is also quite acceptable if their is no money for tax cuts and Gov is in debt to raise tax to pay off the debt?

What is their to argue about?

Matter of opinion and current policy is correct - in my humble opinion.


Now on the **** end of the arguement - why are you looking to say silly things like your entire arguement is based on one document I only saw today. Moreover, it says fiscal policy can be used to manage supply side too. I honestly thought you would come back and fire that at me. But no you trivialise it... I'm old enough to the know the difference thanks.

I read your document now do me a favour and read this:

http://www.saveoursavers.co.uk/why-save/for-the-economy/

I did read this site and doc and I also accept it inflation redistributes income from savers to creditors. Splitlink also made the same point which I acknlowedged. But one has to look at the cons and pros.

If you are setting Gov policy it's like you trying to balance the wealth of well being of your two children. What does one do - sacrifice the poor child for the rich ones well being.

History books are filled with disasters and catastrophes. Non-events are rarely written about. The PIIGS are in trouble because of too much debt, the UK is in trouble because of too much debt and the US is in trouble because of too much debt. Does anyone here think that the recent global financial crisis and subsequent recurring problems are the result of too much savings or because the Government followed a sound money policy?

Governments like inflationary policies because it allows them to live beyond their means and without any need to run a surplus, just print money more when you run out. This is why they promote ‘demand’ side policies and, I can only suppose, it’s why the educational system is skewed to favour it. Consumers are encouraged to borrow and spend as this leads to economic growth, so we are brainwashed to believe.

I can find countless examples in the past where economies have been ruined due to inflationary (debasement) policies perused by governments. I would appreciate if anyone can anyone cite an example in History where an economy has failed because it ran a surplus or a sound money policy. Maybe post a link.

I concur with inflation being an evil and said it will rise and we had big debates againts the deflationary bods.

I concur about raising taxes and only cutting taxes when we can afford it. TAKE NOTE! that means when budget is in balance+...

None of this tax cut when one is in debt. Is this not obvious. The old dogma political BS about catting taxes to stimulate spending on **** we don't need to get profits going doesn't work for UK and hasn't worked for the US. WHO CAN POSSIBLY DISPUTE THIS FOR GOODNESS SAKE.

Governments do extend and the wars as I have argued is a big factor along with daft military star wars and NASA spaace procject to create a shield to protect the USA of incoming missiles.

Sadly the real enemy has effed up big time at home as well as kicking the **** out of two lil countries at collosall cost to the benefit or arms and limb manufacturers.


WHAT I CAN'T BELIEVE AND UNDERSTAND - some people still beat their drum about cutting taxes further and cutting Gov spending on social services.


So there you have the pure and simple economics and plain ol politics too.


People can put what ever clap trap spin they want. Only takes common sense to fathom the smell of roses from BS.


1. Raise taxes
2. Cut spending (maybe cutting Gov sector is a good idea. Lets do it)... I'm open to the idea.
3. i > r


But cutting library and youth services is pretty lame. Virtually save jack.

How about cutting subsidies to the Opera and the arts? Surely some big corp can carry the can similar to advertising?


And I'm not a socialist or a communist. Just bleeding common sense init. Be funny if men in suits and bow ties ran riot in Covent Garden...

 

[counter_violent]

I concur with inflation being an evil and said it will rise and we had big debates againts the deflationary bods.

I concur about raising taxes and only cutting taxes when we can afford it. TAKE NOTE! that means when budget is in balance+...

None of this tax cut when one is in debt. Is this not obvious. The old dogma political BS about catting taxes to stimulate spending on **** we don't need to get profits going doesn't work for UK and hasn't worked for the US. WHO CAN POSSIBLY DISPUTE THIS FOR GOODNESS SAKE.

Governments do extend and the wars as I have argued is a big factor along with daft military star wars and NASA spaace procject to create a shield to protect the USA of incoming missiles.

Sadly the real enemy has effed up big time at home as well as kicking the **** out of two lil countries at collosall cost to the benefit or arms and limb manufacturers.


WHAT I CAN'T BELIEVE AND UNDERSTAND - some people still beat their drum about cutting taxes further and cutting Gov spending on social services.


So there you have the pure and simple economics and plain ol politics too.


People can put what ever clap trap spin they want. Only takes common sense to fathom the smell of roses from BS.


1. Raise taxes
2. Cut spending (maybe cutting Gov sector is a good idea. Lets do it)... I'm open to the idea.
3. i > r


But cutting library and youth services is pretty lame. Virtually save jack.

How about cutting subsidies to the Opera and the arts? Surely some big corp can carry the can similar to advertising?


And I'm not a socialist or a communist. Just bleeding common sense init. Be funny if men in suits and bow ties ran riot in Covent Garden...

To say that there is no alternative other than more of the same is frankly lazy, dishonest and above all complete bullsh1t.

Look at what does work instead of what doesn't. Have you watched the vid yet?

 

[Atilla]

To say that there is no alternative other than more of the same is frankly lazy, dishonest and above all complete bullsh1t.

Look at what does work instead of what doesn't. Have you watched the vid yet?

On the contrary;

1. raising taxes
2. cutting spending

are both novelties to most people...

Where have you been last 30 years - planet Pluto?

What we had in the past have been...

a. cutting taxes
b. raising spending...


Geeeezzz don't you recognise your own pooh...

 

[new_trader]

Atilla,

I think it is best if we revisit this thread in 3-5 years as there is no point continuing the debate. There is enough information in this thread for people to make up their own minds. I have put my money where my mouth is which means it is largely invested outside of the U.K. I am afraid (confident) that the government will continue to try and tax and inflate its way out of this crisis. You might see nominal gains as a result of all the inflation but that will just create the illusion of wealth as it has always done, but the general U.K population will be worse off than other nations. Like someone else once said, what is the good of having a house worth £10 Million if it costs you £5000 just to fill your refrigerator with food?

 

[new_trader]

Atilla,

I think it is best if we revisit this thread in 3-5 years as there is no point continuing the debate. There is enough information in this thread for people to make up their own minds. I have put my money where my mouth is which means it is largely invested outside of the U.K. I am afraid (confident) that the government will continue to try and tax and inflate its way out of this crisis. You might see nominal gains as a result of all the inflation but that will just create the illusion of wealth as it has always done, but the general U.K population will be worse off than other nations. Like someone else once said, what is the good of having a house worth £10 Million if it costs you £5000 just to fill your refrigerator with food?

Nobel Laureate in Economics = Keynesian Government shill.

There is nothing fresh and original about their solutions, it is more of the same. Note how none of them will ever mention the 1920-21 depression when the FED was passive and the economy corrected itself.

Another housing bubble anyone? The last one worked well so let's do it again. No talk of boosting manufacturing, it's all about borrowing and spending.

And of course, every reckless Governments dream.

about 2:45

 

[Pat494]

What a lot of top economists seem not to realize is, there is a fundamental difference between the present financial crisis and the crash of the 1920s. In those days it was a matter of getting the economy back to ticking over again whereas now it is that coupled with the fact that there is much more competition from other economies, namely the BRIC countries.

In the 1920s there were only 2 areas of much economic activity and that was the USA and Europe. The USA had caught up Europe in manufacturing and were confident of success. They were flooding the USA with cars, tractors etc while the Europeans were struggling politically and economically after WW1. Really a 1 horse race. But now there is stronger competition. General Motors was just saveable but for how long ?

Europe and the USA Govts need to at least give their business comunities a level playing field in order to compete. Wasting money on medicare etc. could be a costly decision. Fiddling around with fiscal and monetry policy won't be enough imho

 

[Atilla]

What a lot of top economists seem not to realize is, there is a fundamental difference between the present financial crisis and the crash of the 1920s. In those days it was a matter of getting the economy back to ticking over again whereas now it is that coupled with the fact that there is much more competition from other economies, namely the BRIC countries.
True enough but in those days governments were not so much concerned about domestic policy as more in conducting international adventures and Worldly standing. In fact there was pretty much little or no government when it came to business and trade. Little or no controls.

One could argue the reduction in wars and economic advancement was largely to do with better social policies and the conscience of some at the top thinking this suffering can't and shouldn't go on much longer and making amends.

Distribution of wealth and focus on domestic issues subsequently produced the outstanding advance of the 20th century.

In the 1920s there were only 2 areas of much economic activity and that was the USA and Europe. The USA had caught up Europe in manufacturing and were confident of success. They were flooding the USA with cars, tractors etc while the Europeans were struggling politically and economically after WW1. Really a 1 horse race. But now there is stronger competition. General Motors was just saveable but for how long ?

Europe and the USA Govts need to at least give their business comunities a level playing field in order to compete. Wasting money on medicare etc. could be a costly decision. Fiddling around with fiscal and monetry policy won't be enough imho

I agree we need to concentrate on national academies and bring back apprenticeship and work releated polytechnics as opposed to expensive theoretical universities.

I think what will happen as already experienced is companies will employ based on which university one is from and whether tuition fees were £9K or £18K and you can guess the outcome...

I've read somewhere that Germany and Japan has better skilled and trained people than the UK. Soon this will also be better educated.


I reckon companies should off more scholarships to the young instead of bonuses. The future of our nation and personal interest lies in the young blood of this country not the old fat cats.

 

[Pat494]

Just wait for Attila to find the above gem.What do I think ? Phew hard to know really. Except that Cameron should shower less money on 3rd world losers and subsidise the poor here in the UK.

That was post no.3 !! This post no. 100 - the ton in my days !!
Certainly looks like I got the above right tho

 

[Pat494]

Different points of view are usually more interesting imho.