[kshatrea]

Firstly, there is no need for an ad hominem attack on Austrian economics (which matterhorn did not identify in his small para) and so you cannot say it will not work since you obviously never tried it, and you never gave a reason for it to not work. Keynesianism has had control of the economy for the last 5 years atleast, and look at the result. Yet, you say it will work. I say it can only create bubbles. Bring on the attacks. And yes, I agree with matterhorn that government directed economic activity is essentially malinvestment. It is production that is important; most government activity has been focussed on spending/debt. EDIT: No socialist controlled economy? Which world are you living in? India,my country has strict labour laws for about 85% of the businesses, including all in manufacturing, textiles etc. You cannot make a profit without offering workers a fair wage as decided by them & the GOVERNMENT first. Have you heard of autorickshaw pricing here? Who controls the prices? Customers? No, rickshaw unions, & the GOVERNMENT. So, all investment into autorickshaws, clean cars is distorted by these disincentives. That is one of about a million examples. The only place where there is no intervention (or less intervention) here is IT, which is why you see so much progress in IT. Have you been to Vietnam? Sri Lanka? I have, and I know business owners and I do know workers as well in these nations. No more ad hominems please.

[trhtrsh]

The IMF just announced that they have concluded that decidedly anti-Keynesian austerity policies in Europe of the past 5 years were a mistake:

http://www.bloomberg.com/news/2013-01-04/imf-officials-we-we...

The IMF isn't a pack of socialists, they were the main cheerleaders for austerity in the first place.

[eli_gottlieb]

I have not been to India, but I live in Israel. It used to have a inefficient, bureaucratic, and stifled economy that could actually be called somewhat socialist (many worker-owned cooperative enterprises) before it privatized many things. Now it has an inefficient, bureaucratic, and stifled economy with private capitalists making all the money. Big difference!

Socialism is worker control of the means of production. There can be state-socialist economies, and there can be stateless ones. However, not all state intervention in the economy is socialist.

Austrian economics (which matterhorn did not identify in his small para) and so you cannot say it will not work since you obviously never tried it, and you never gave a reason for it to not work.

The problem is that Austrian economics literally does not have a proposal other than "completely destroy all government programs, convert your currency to a gold standard, and the Free Market will solve everything." Every single economic problem is then blamed on state intervention in the economy, starting at central banks controlling interest rates on capital and extending all the way down to unemployment insurance and bread subsidies.

Thus, just as a completely state-socialist economy is a Bad Idea, so is a completely stateless-capitalist economy.

I have many measures in mind for people to try, and they are mostly not actually Keynesian. I think Keynesianism mostly patches the problems without solving them, and I predicted moral hazard when governments started bailing out their banks.

[digitalengineer]

What we saw after the 2008 was not real Keynesian Economics. This was Keynes: During a recession/depression do: 1. A reduction in interest rates (monetary policy), and 2. Government investment in infrastructure (fiscal policy). By reducing the interest rate at which the central bank lends money to commercial banks, the government sends a signal to commercial banks that they should do the same for their customers.

He didn't say: Prop up the banks, to big-to-fail, save Wall Street and screw main street. Apart from that he advized paying off debt when the economy is doing well. We haven't seen that for the last 40 years or so.

[khuey]

In other words arguing Keynes vs. Marx and whatnot is a waste of time. The powerful always manage to skim off value for themselves and when the system collapses they laugh all the way to the bank while the rest of us argue about whether or not it was real communism or real Keynesian policy.

[digitalengineer]

True. But Keynes is tought at every high school in the Western World and parotted in the news each and every time as the best thing to do, so say clever minds. Propaganda, nothing more.

[eli_gottlieb]

Agreed, but I think Keynes "doesn't go too far enough". We ought to be simply erasing bad debts and bubble-driven debts to let various markets (particularly real-estate and stocks) revert to the natural price levels where real buying power can pay for the assets.