Keynesian Economics Is Right

[phillip1882]

in economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services.

 

In economics, stagflation is a situation in which the inflation rate is high and the economic growth rate is low.

both from Wikipedia. now...

http://www.shadowstats.com/alternate_data/unemployment-charts

http://www.shadowstats.com/alternate_data/inflation-charts

and one more...

http://www.shadowstats.com/alternate_data/money-supply-charts

does not bode well for Keynes.

 

Keynes approach was top down, in the majority of cases. he made the assumption that markets aren't self correcting.

but i make the assumption that markets are quite capable of self correcting, it's government that's incapable of self correcting. it's incapable of self correcting because it doesn't need to, its debts are guaranteed by the taxpayer.

 

again, i believe that enforced government regulations are the way to keep these free market companies honest. publically traded companies work for the shareholders, not the dupes customers. few middle class folks even own stocks, even fewer low-classers. nevermind for now that those who perpetrated the real estate mess have yet to be held accountable. yes, that's a poor job by government, but it does not logically follow that it is not government's job.

okay, firstly the government helped fuel the housing crisis. secondly, I'm not in favor of no regulations, but they should be reasonable and fair to everyone. for example, i would be in favor of a regulation that prevents employers from putting their employees in an unreasonably risky situation. i would be in favor of a regulation that prevents employers from causing undue pollution. i would be in favor of a regulation that prevents lobbying with bribes. etc. but i don't see a clear way to get to such a point from where we are at. what sort of regulations would you endorse that i haven't listed?

[phillip1882]

if getting a job or starting a busines is as easy as you want us to believe, why do we have such high unemployment?

<_< because we are spending money we don't have on things we don't need. in all parts of society.

because the "federal reserve" exists, and is flushing our jobs down the toilet.

because government is taxing too high, with too many ways for the rich to dodge taxes.

pick your poison.

i don't quite get why you are so enamored with the rich and their money and so dismissive of the current plight of the middle class, the poor, the old, and the sick.

I'm not enamored with the rich and their money. I'm enamored with the idea that what you work for you should be able to keep.

I'm not dismissive of the plight of these people. my question is: how best to serve their plight. is it really through government action and legislation, or is it through everyone giving voluntarily what he can afford.

[Turtle]

both from Wikipedia. now...

http://www.shadowstats.com/alternate_data/unemployment-charts

http://www.shadowstats.com/alternate_data/inflation-charts

and one more...

http://www.shadowstats.com/alternate_data/money-supply-charts

does not bode well for Keynes.

 

Keynes approach was top down, in the majority of cases. he made the assumption that markets aren't self correcting.

but i make the assumption that markets are quite capable of self correcting, it's government that's incapable of self correcting. it's incapable of self correcting because it doesn't need to, its debts are guaranteed by the taxpayer.

 

i see no high inflation in those graphs. you referred to the 70's stagflation, but that's off those charts. :shrug: i'm trying to get at some facts here, rather than assumptions.

 

 

okay, firstly the government helped fuel the housing crisis. secondly, I'm not in favor of no regulations, but they should be reasonable and fair to everyone. for example, i would be in favor of a regulation that prevents employers from putting their employees in an unreasonably risky situation. i would be in favor of a regulation that prevents employers from causing undue pollution. i would be in favor of a regulation that prevents lobbying with bribes. etc. but i don't see a clear way to get to such a point from where we are at. what sort of regulations would you endorse that i haven't listed?

 

i'm not sure what you mean "government fueled" the crisis, if other than not doing their job. but again, this is not an argument to get rid of the job. if one of your free-market folk can't do some heavy lifting on their own at the office, they don't leave the lifting unlifted, they add some help. why should it be any different for a government?

 

we are in fact seeing growth in private sector jobs and while it is slow growth, it is not the situation of "obama" made things worse" that the conservatives paint.

 

well, as i say i can't fathom your broad-field government-is-bad sentiments. you haven't so much as said a "that's too bad" about those who are struggling, even if to say then that they deserve it. :shrug: so anyway, here's some regulation that makes sense to me, but that rebublicans blocked as part of their just say no refrain. good grief.

 

G.O.P. Blocks Debate on Financial Oversight Bill @ NYT

WASHINGTON — Senate Republicans, united in opposition to the Democrats’ legislation to tighten regulation of the financial system, voted on Monday to block the bill from reaching the floor for debate. As both sides dug in, the battle has huge ramifications for the economy and for their political prospects in this year’s midterm elections.

...

President Obama joined in criticizing Republicans for refusing to begin debate, and urged them to “put the interests of the country ahead of party.”

 

“We are as vulnerable as we are today in the waning days of April 2010 as we were in the fall of 2008,” said Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, who is the primary sponsor of the bill. “Nothing has changed, except, of course, jobs have been lost, homes have gone into foreclosure, retirement incomes have evaporated, housing values have declined

...

The bill, developed in months of talks between senators in both parties, would touch every aspect of the financial system.

 

It would authorize the government to shut down a financial institution deemed to pose a threat to stability of the system, using a $50 billion fund financed by big banks to help the failed company meet financial commitments while it is being wound down.

 

The bill would also establish a consumer protection agency intended to end predatory lending practices and require that consumers receive detailed information on mortgages, credit cards and other financing. It would provide new oversight of hedge funds and impose tough rules on the trading of derivatives, the financial instruments at the center of the 2008 economic crisis.

 

It would restructure the federal system of bank regulation, moving many small banks out from under the Federal Reserve, while providing shareholders of public companies with greater say in electing directors and an advisory role on executive pay.

...

[Turtle]

<_< because we are spending money we don't have on things we don't need. in all parts of society.

because the "federal reserve" exists, and is flushing our jobs down the toilet.

because government is taxing too high, with too many ways for the rich to dodge taxes.

pick your poison.

 

I'm not enamored with the rich and their money. I'm enamored with the idea that what you work for you should be able to keep.

I'm not dismissive of the plight of these people. my question is: how best to serve their plight. is it really through government action and legislation, or is it through everyone giving voluntarily what he can afford.

 

to quote the primary writer of the constitution of the untied states, james madison writing as publius in the federalist papers, "if men were angels, no government would be necessary." it is now as it was then; people are no angels.

[phillip1882]

to quote the primary writer of the constitution of the untied states, james madison writing as publius in the federalist papers, "if men were angels, no government would be necessary." it is now as it was then; people are no angels.

ummm... was James Madison the one that penned the alien and sedition acts?

you know. the one that allowed arresting people for criticizing the government?

often times considered the worst piece of legislation in the history of america?

yeah.... not taking advice from him.

men don't stop "not being angels" when they become part of the government.

and now they have the law on their side.

[Turtle]

ummm... was James Madison the one that penned the alien and sedition acts?

you know. the one that allowed arresting people for criticizing the government?

often times considered the worst piece of legislation in the history of america?

yeah.... not taking advice from him.

men don't stop "not being angels" when they become part of the government.

and now they have the law on their side.

 

:lol: well, wisdom is where you find it, and i don't care for all that madison said or did either. you seem to agree with the sentiment, and that's what i meant to convey. gotta be gone for the day so will have to ask your forbearance in continuing our argument 'til later. here's another sentiment in which i think we can find some agreement; if not in enforcement/application, at least in principles. :)

 

ALL I REALLY NEED TO KNOW I LEARNED IN KINDERGARTEN

 

(a guide for Global Leadership)

 

All I really need to know about how to live and what to do and how to be I learned in kindergarten. Wisdom was not at the top of the graduate school mountain, but there in the sand pile at school.

 

These are the things I learned:

● Share everything.

● Play fair.

● Don't hit people.

● Put things back where you found them.

● Clean up your own mess.

● Don't take things that aren't yours.

● Say you're sorry when you hurt somebody.

● Wash your hands before you eat.

● Flush.

● Warm cookies and cold milk are good for you.

● Live a balanced life - learn some and think some and draw and paint and sing and dance and play and work every day some.

● Take a nap every afternoon.

● When you go out in the world, watch out for traffic, hold hands and stick together.

● Be aware of wonder. Remember the little seed in the Styrofoam cup: the roots go down and the plant goes up and nobody really knows how or why, but we are all like that.

● Goldfish and hamsters and white mice and even the little seed in the Styrofoam cup - they all die. So do we.

● And then remember the Dick-and-Jane books and the first word you learned - the biggest word of all - LOOK.

 

Everything you need to know is in there somewhere. The Golden Rule and love and basic sanitation. Ecology and politics and equality and sane living.

 

Take any one of those items and extrapolate it into sophisticated adult terms and apply it to your family life or your work or government or your world and it holds true and clear and firm. Think what a better world it would be if we all - the whole world - had cookies and milk at about 3 o'clock in the afternoon and then lay down with our blankies for a nap. Or if all governments had as a basic policy to always put things back where they found them and to clean up their own mess.

 

And it is still true, no matter how old you are, when you go out in the world, it is best to hold hands and stick together

source

[charles brough]

to me, it's not really a question of kaynes or free market, though i side with the free market.

the question is logic. do you own yourself? do you own the product of your labor? do you have the right to sell your labor for something you consider of equal or greater value? do you have the right to employ people? etc. etc.

if your answer is yes to all these questions, then what's your argument for taxing the rich more?

if you believe they are earning thier money from illigimate means, then boycott their goods and services. refuse to work for them. make a good or service better than they do. etc.

people seem to forget that the manner in which the rich got that way in the first place was mostly through voluntary transactions.

 

I see your way of thinking. You see it all in terms of "rights." Because our Constitution and the Bill of Rights are central to our secular ideology, "rights" can be used to defend almost everything.

 

I see it from another perspective. In my study of civilizations, I find that the increased concentration of wealth in the hands of the few leads to an upper class and the gradual shrinkage of the middle class. I am partial to the middle class because. I would probably cheer at the thought of the upper income class gaining more and more power and hence wealth if I thought it was responsible. My reading on the subject tells me that the noble class of previous ages prided itself on its responsiblities, honor and the welfare of the nation. And as with that class, when it lost those traits, it lost contact with the people and was ultimately over-thrown---a fate our luxury-loving elite will ultimately experience themselves.

[Turtle]

<_< because we are spending money we don't have on things we don't need. in all parts of society.

because the "federal reserve" exists, and is flushing our jobs down the toilet.

because government is taxing too high, with too many ways for the rich to dodge taxes.

pick your poison.

...

 

i pick..."we are spending money we don't have on things we don't need. in all parts of society.", and i vociferously...agree. :rant: :lol: i'll leave government spending particulars for another time & go right to main street. personally, i take a minimalist stance partly of design and partly of necessity, so i get a rapid rankle when i see waste. driving fast, keeping pets, throwing out food, designer clothes, mcdonald's toys, wattered lawns, acme widgets, hot tubs, granite countertops, custom car wheels, barbie dolls, & nick-knacks, do-dads, & what-have-you's to who laid the chunk.

 

of course, it's an old argument as dear dead gentle ben reminded us in poor richard's -or such a matter- saying "waste not, want not. no doubt however that things took a turn with the industrial revolution and not much looking back went on until the 60's & 70's with the hippies and the gasoline shortages. so in explanatory defense of wastefullness in the baby boomers, the spending-what-you-don't-have is a birthright, which is to say it's all they know. their parents went through the depression, and while that made some...shall we say "thrifty", for others after the war it was time to live it up.

 

so here we are today and...

aging of america

About one in eight Americans are age 65 or above today, compared to one in 10 in the 1950s. By 2030, one in five Americans will be 65 or older, roughly the same as Florida today. The number of people age 65 or older will nearly double between 2000 and 2030.

 

what is new, and hopeful in my view, is that the global effects of this waste have come into a sharp focus thanks to academic study and the internet in the last decade or so and while the baby-boomers may be a lost cause -partly too old to change and partly because they are going to be too broke to afford waste-, gen X & the millennial generation seem to be getting the message. if not always embracing it, they at least seem to be receiving it and talking about it.

 

have to post this that i just found while surfing as i wrote. how to make wasters of gen-x's would be a good subtitle. bless cheryl's greedy little heart. :doh:

 

6 Rules of Marketing to Generation X

 

Combining unique preferences, resentment and rebellious tendencies, and elaborate priorities, marketing to Generation X is quite a difficult task. Here are 6 rules of marketing to Generation X.

1.Don't recycle the past. Generation X knows many popular marketing strategies that have worked for Baby Boomers. Gen X knows what has been used already, and in turn know what is a new and exciting way to grab their attention.

 

in other words, if you can't baffle them with bullshit (anymore), dazzle them with brilliance.

 

2. What's "In" may not be in with Gen X. ...

3. "Hard selling" is poor selling.

 

meh

 

4.Honesty is the best policy. Manipulating Gen Xers is quite difficult, as they know the tricks and gimmicks that come along with sales. Be honest with them. Gen Xers will be more willing to buy or try your product if they TRUST you.

 

good grief. at least cheryl lets out of the bag that marketing is focused on tricks and gimmicks. yay business!! :doh: so the new pitch: "i know you don't really need this, but look how shiny & green it is". good grief. :hammer:

 

anyway, that's all i can stomach. gen X gets me thinking on the Occupy Wallstreet business so i think i'll go start a thread on that as it might become a "thing". catch y'all on da flip side.

[charles brough]

http://www.elliottwa...our-Europe.aspx

 

http://www.consumera...profitable.html

 

There are plenty of articles, there are congressional reports from 2008. I lost links to most since I studied the crisis three years ago.

I looked at the two references and the first was of the crisis in 2008 when the banks stopped lending because the big ones were in threat of default. If banks stop lending, it makes no difference how much cash they have because credit dries up, and that is the same as a shrinkage of currency, the money supply. Because the Bush and Obama administrations saved the big banks from default, we avoided a huge drop in credit and currency which would have shrunk the economy, caused deflation and a depression.

 

"Money supply" or "liquidty" is made up of currency and available credit. If banks are not willing to loan even though they have enough cash, then the economy is not "liquid."

 

Incidentally, one of the claims that stimulus won't work on the economy is that it causes stag-flation. This is a red herring. It occurred once only with us and was the result of a drastic cut in our oil supply. People lined up at gas stations to top of their gas tanks. The jump in energy cost took a heavy toll on the economy and caused all costs to rise because all mfg. depends on energy. Japan had it for ten years. We told them to inflate and get out of it but they didn't and it lasted that long.

 

What we need to do get out of this slump is stimulus to get prices rising again so that purchasers, banks and mfgs are not all holding back their buying, lending and manufacturing because of expecting lower prices ahead.

 

The trouble with inflation is that it is seen as a panecea.. As soon as we recover, it will be time to cut back on government expenses and then balance the budget. Unfortunately, however, that is not apt to happen. People now days don't think of the long term benefit for the country. Its all only short term.

[Turtle]

i see this fella on news programs from time-to-time, maybe even charlie rose a couple times. anyway, i ran acorss this piece from him that bears on the "stimulus is bad" meme. sfyc :shrug:

 

Bad anti-stimulus arguments @ ny times

A number of conservative economists have been arguing against a stimulus plan centered on government spending. Fair enough. But one argument I keep reading bugs me: it’s the claim that spending-based stimulus is bad because economic theory tells us that a marginal dollar of private spending is better than a marginal dollar of government spending.

 

That’s just wrong; it’s a misreading of basic, Econ 101 level, economics.

...

When we’re asking whether it’s better to have the government stimulate the economy or to try to stimulate private spending, we’re asking among other things whether a marginal dollar spent on public goods is worth more or less than a marginal dollar spent on private consumption. And there’s nothing, even in Econ 101, that clearly favors private spending on private goods over public spending on public goods.

 

In other words, the attempt to claim the authority of economics for the idea that stimulus in the form of tax cuts is better, at a microeconomic level, than stimulus in the form of infrastructure spending is a case of bait and switch. Don’t fall for it.

[phillip1882]

in some sense i agree, government spending, within reasonable limits is not necessarily worse/better than private sector spending, as far as its effect on the economy.

but when government spend more than it takes in, that places the economy in very real danger.

if i were to max out my credit card, go on a spending spree, eventually I'll go broke. i may even suffer prison time for it.

when the government does it, everyone goes broke, everyone suffers.

[Turtle]

in some sense i agree, government spending, within reasonable limits is not necessarily worse/better than private sector spending, as far as its effect on the economy.

but when government spend more than it takes in, that places the economy in very real danger.

if i were to max out my credit card, go on a spending spree, eventually I'll go broke. i may even suffer prison time for it.

when the government does it, everyone goes broke, everyone suffers.

 

ok; good. :thumbs_up just to reiterate, the proposed stimulus is not just any spending as i understand it; it's largely targeted spending on infrastructure. i know they have more tagged on the bill (if they've even written it yet, let alone bring it to a vote.), tax cuts for middle class & tax hikes for the rich, and this is one problem i have, not with government in and of itself, but with those electees of ours in the house & senate. why not do each separate "item" as a separate bill so something gets done where there is agreement? and i don't care for the last minute insertions and sow's ear spending by any party. and enough of spending taxpayer dollars to spy on taxpayers under the guise of security! and get out of our bedrooms with the consensual crimes!! and...oh... well, i do run on. :rant: :lol:

 

i agree we should reduce the debt and that both parties have had a hand in creating it. getting rid of government is not the way to fix governance. i read up some on the classic liberalism/libertarianism and i agree with many of the precepts. but i also read up on "limited" government vs. "small" government and they are not the same thing. we already have a limited government. it is limited by the constitution which further limits the 3 branches. madison's bill of rights further limits government. if those specified rights are already implied generally as the anti-federalists charge(d), then why such a squabble over spelling them out? they are after all reactions to what the founders didn't care for in other governments in europe. it ain't perfect, but it's a damn sight better than anarchy. maybe if more people actively participated in politics between elections, it wouldn't be so easy for the corporations and special interests to wedge their way in. the price of freedom is eternal vigilance. ~tj

 

lastly, it would be extremely rare for someone to be jailed for credit card debt. it's not illegal to default on a debt and the US hasn't had debtors' prisons for 150 years. don't fall prey to scare tactics. source

[phillip1882]

i agree we should reduce the debt and that both parties have had a hand in creating it.

i agree completely here.

getting rid of government is not the way to fix governance.

so... you would keep everything? remove no facet the government currently does?

i read up some on the classic liberalism/libertarianism and i agree with many of the precepts. but i also read up on "limited" government vs. "small" government and they are not the same thing. we already have a limited government. it is limited by the constitution which further limits the 3 branches.

based on some of the laws and policies that have gotten through, not sure i agree.

madison's bill of rights further limits government. if those specified rights are already implied generally as the anti-federalists charge(d), then why such a squabble over spelling them out?

because historically government tends to over step its bounds.

maybe if more people actively participated in politics between elections, it wouldn't be so easy for the corporations and special interests to wedge their way in. the price of freedom is eternal vigilance. ~tj

partly i agree, but people are trying to be more active now. it hasn't helped much.

[geko]

People now days don't think of the long term benefit for the country. Its all only short term.

 

Which is why people support inflation. There's no end for a monetary policy that relies on constant growth. Any drop in increased demand and we get problems again. Inflationary policy, by extension, necessarily causes inefficient resource allocation; unless we think, for example, that the last growth period was beneficial because people had employment and businesses were producing and that the now idle constructions were an efficient allocation of resources and labour.

 

If i may i'd like to ask my question again in hope of an answer. Why do some of you think that depreciating a currency makes poor people wealthier? If that's too specific then maybe answer why a steadily depreciating currency is good for a country's people over the long term? Why are we richer with 1 rather than 2?

[Turtle]

getting rid of government is not the way to fix governance.

so... you would keep everything? remove no facet the government currently does?

 

not at all. i listed some things i think are intrusive and wasteful, such as consensual crimes and earmarks. i'll think on some more.

 

i read up some on the classic liberalism/libertarianism and i agree with many of the precepts. but i also read up on "limited" government vs. "small" government and they are not the same thing. we already have a limited government. it is limited by the constitution which further limits the 3 branches

based on some of the laws and policies that have gotten through, not sure i agree.

well, when there is such uncertainty this is where debate comes in, between voters and electees and among electees. when congrees does something you don't like, you're supposed to complain. our democracy is a messy business, but it's necessary business.

 

madison's bill of rights further limits government. if those specified rights are already implied generally as the anti-federalists charge(d), then why such a squabble over spelling them out?

because historically government tends to over step its bounds.

 

that's the point of the bill of rights; to forestall the overstepping by governments historically seen in europe.

 

maybe if more people actively participated in politics between elections, it wouldn't be so easy for the corporations and special interests to wedge their way in. the price of freedom is eternal vigilance. ~tj

partly i agree, but people are trying to be more active now. it hasn't helped much.

 

so your implication then is that peoples' activity have helped some. half a loaf is better than none. it took time to free the slaves, for women to get the vote, for civil rights to mark out a line, or to repeal prohibition to name a few bumps in the road. why should the current crisis be any different? sometimes i like to think in terms of us having 90% employment.

 

i found this piece interesting; i ran across it in some of the other reading i have referenced.

 

hyperbolic discounting

In behavioral economics, hyperbolic discounting is a time-inconsistent model of discounting.

 

Given two similar rewards, humans show a preference for one that arrives sooner rather than later. Humans are said to discount the value of the later reward, by a factor that increases with the length of the delay. This process is traditionally modeled in form of exponential discounting, a time-consistent model of discounting. A large number of studies have since demonstrated that the constant discount rate assumed in exponential discounting is systematically being violated.[1] Hyperbolic discounting is a particular mathematical model devised as an improvement over exponential discounting. Hyperbolic discounting has been observed in humans and animals. ...

 

...If i may i'd like to ask my question again in hope of an answer. Why do some of you think that depreciating a currency makes poor people wealthier? If that's too specific then maybe answer why a steadily depreciating currency is good for a country's people over the long term? Why are we richer with 1 rather than 2?

 

i'm unsure who you are directing this too. if i implied what you say, i'm not aware of it. most of what i see being proposed are short term things, and while that may be necessary i do agree there needs to be some long-term planning as well. nevertheless, the best laid plans of mice & men often go awry.

 

catch you all this evening; i'm off to visit grandkids.

[JMJones0424]

Slightly off-topic correction first.

 

madison's bill of rights further limits government. if those specified rights are already implied generally as the anti-federalists charge(d), then why such a squabble over spelling them out?

because historically government tends to over step its bounds.

that's the point of the bill of rights; to forestall the overstepping by governments historically seen in europe.

 

I may be wrong, but the anti-federalists were generally opposed to the Constitution, not the Bill of Rights, and they favored amending the Articles of Confederation instead. The Bill of Rights was drafted to win their support for the Constitution. The sentiment you describe, that the Bill of Rights are superfluous and possibly dangerous, was famously expressed by Hamilton in Federalist Number 84

They [the Bill of Rights] would contain various exceptions to powers which are not granted; and on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do? Why for instance, should it be said, that the liberty of the press shall not be restrained, when no power is given by which restrictions may be imposed? I will not contend that such a provision would confer a regulating power; but it is evident that it would furnish, to men disposed to usurp, a plausible pretense for claiming that power.

Article 1 Section 8 specifically enumerates all the powers granted to the federal government. The argument is that listing powers which are prohibited leaves the door open to the possibility that newly conceived powers not prohibited would be allowed. Of course this argument is weakened by the fact that Article 1 Section 9 and 10 lists prohibited powers :) Regardless, the 10th Amendment should have been sufficient to clear up any misconstrued intentions. Whether it has is a debate for another thread.

 

 

And back on topic-

 

I think two very important, yet distinct, concerns over the federal budget are being conflated into the one addressed here.

 

1)According to Keynesian economics, during an economic downturn, the federal government should stimulate the economy through increased spending (deficit spending if need be) providing artificial demand to prime the pump. This is due to the fact that during a downturn, it is natural human tendency to tighten spending, which in turn exasperates the downturn. By temporarily increasing spending, especially on infrastructure, education, and other long-term investments in the nation, the federal government can stimulate commerce and receive more in future taxes from a recovered economy than is spent today.

 

2)Long-term deficit spending, especially in those areas which do not provide for increased tax revenues in the future, such as the military and entitlements, creates an increasing debt burden that if left unchecked will bring the national economy to its knees.

 

While it may seem contradictory, I think both points are valid. The analogy of running up a family's credit cards to pay for temporary luxuries fails, if point one is followed correctly. A better analogy would be a family faced with little prospect of income growth, but with the ability to borrow cheaply and the expectation that the amount invested today will be more than made up for in future earnings. The rate at which the US government can borrow money is at or near all time lows. It makes poor economic sense to forego short-term borrowing now because of concerns over long-term debt. There are numerous examples of how this can be done correctly, including the interstate highway system, California's university system, and the TVA.

[charles brough]

in some sense i agree, government spending, within reasonable limits is not necessarily worse/better than private sector spending, as far as its effect on the economy.

but when government spend more than it takes in, that places the economy in very real danger.

if i were to max out my credit card, go on a spending spree, eventually I'll go broke. i may even suffer prison time for it.

when the government does it, everyone goes broke, everyone suffers

That is certainly true of the individual and to some extent other countries, even us, eventually. However, we can still have a number of economic cycles of growing debt, higher prices, recovery, bubble bursting and then recession ahead before we lapse into what could the the last and final hyper inflation such as which helped bring down many earlier civilizations---paper money inflation in China, debased coinage in Rome, etc.

 

We will continue to follow this cycle. Even the Tea Party people will become impotent when things get bad enough and the street demonstrators turn into immense rioting mobs because of their hopeless condition. Each inflation lapses into a need for more inflation, but we have a long way to go. So far, we have averaged only about 3% a year. The Bush Administration crippled us but we are not dead yet . . .