Comments on: Bernanke quote revisited http://moslereconomics.com/2009/11/28/bernanke-quote-revisited/ St Croix, United States Virgin Islands Wed, 23 May 2012 10:53:37 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: warren mosler http://moslereconomics.com/2009/11/28/bernanke-quote-revisited/comment-page-1/#comment-14292 warren mosler Tue, 08 Dec 2009 02:32:58 +0000 http://www.moslereconomics.com/?p=9445#comment-14292 the deficits largely come counter cyclically due to the automatic stabilizers where they act to reverse contractions, so the data has to viewed in that light. The proactive deficit was engineered by Bush in 2003, for example, and was followed by a reasonably expansion. the deficits largely come counter cyclically due to the automatic stabilizers where they act to reverse contractions, so the data has to viewed in that light.

The proactive deficit was engineered by Bush in 2003, for example, and was followed by a reasonably expansion.

]]> By: Rodger Malcolm Mitchell http://moslereconomics.com/2009/11/28/bernanke-quote-revisited/comment-page-1/#comment-14284 Rodger Malcolm Mitchell Mon, 07 Dec 2009 21:34:57 +0000 http://www.moslereconomics.com/?p=9445#comment-14284 The problem is with the fundamental belief: ". . . a determined government can always generate higher spending and <i>hence positive inflation.”</i> Since we went off the gold standard in 1971, there has been no relationship between federal deficits -- even large deficits -- and inflation. [See the graph at <a href="http://rodgermmitchell.wordpress.com/2009/09/07/introduction/" rel="nofollow">http://rodgermmitchell.wordpress.com/2009/09/07/introduction/</a> Rodger Malcolm Mitchell The problem is with the fundamental belief: “. . . a determined government can always generate higher spending and hence positive inflation.”

Since we went off the gold standard in 1971, there has been no relationship between federal deficits — even large deficits — and inflation. [See the graph at http://rodgermmitchell.wordpress.com/2009/09/07/introduction/

Rodger Malcolm Mitchell

]]> By: Ralph Musgrave http://moslereconomics.com/2009/11/28/bernanke-quote-revisited/comment-page-1/#comment-13985 Ralph Musgrave Mon, 30 Nov 2009 12:08:23 +0000 http://www.moslereconomics.com/?p=9445#comment-13985 Raul Groom: I don’t see any reason for thinking that, as you put it, “During any period in which government deficit spending is insufficient to support savings desires, the private sector will dissave..”. The whole problem is that this is exactly what the private sector does NOT do in these circumstances. That is, when households are in “saving mode” they just stay in that mode, with unemployment being the consequence. This is Keynes’s “paradox of thrift”. Charles Yaker: “creating jobs over there”. Too right: the latest farcical example of this was Citibank’s £8bn loan to Dubai six weeks after being bailout. It would have made more sense for the government /Fed to have printed £8bn of $20 bills and thrown them out of the window, preferably on a windy day. That would have eased the debts of indebted households and/or boosted demand in the US, and reduced unemployment. Raul Groom: I don’t see any reason for thinking that, as you put it, “During any period in which government deficit spending is insufficient to support savings desires, the private sector will dissave..”. The whole problem is that this is exactly what the private sector does NOT do in these circumstances. That is, when households are in “saving mode” they just stay in that mode, with unemployment being the consequence. This is Keynes’s “paradox of thrift”.

Charles Yaker: “creating jobs over there”. Too right: the latest farcical example of this was Citibank’s £8bn loan to Dubai six weeks after being bailout. It would have made more sense for the government /Fed to have printed £8bn of $20 bills and thrown them out of the window, preferably on a windy day. That would have eased the debts of indebted households and/or boosted demand in the US, and reduced unemployment.

]]> By: Charles Yaker http://moslereconomics.com/2009/11/28/bernanke-quote-revisited/comment-page-1/#comment-13983 Charles Yaker Mon, 30 Nov 2009 05:08:01 +0000 http://www.moslereconomics.com/?p=9445#comment-13983 My MY I guess we are paying for Jobs over there and not here. Do they really think we are that stupid? My MY I guess we are paying for Jobs over there and not here. Do they really think we are that stupid?

]]> By: RaulGroom http://moslereconomics.com/2009/11/28/bernanke-quote-revisited/comment-page-1/#comment-13982 RaulGroom Mon, 30 Nov 2009 04:49:12 +0000 http://www.moslereconomics.com/?p=9445#comment-13982 Was chewing on this today and had a thought - possibly incorrect, so I thought I'd inquire. Is it correct to say that: During any period in which government deficit spending is insufficient to support savings desires, the private sector will dissave until either deficits increase or the private sector's increasing debt burden triggers a finance crisis? Was chewing on this today and had a thought – possibly incorrect, so I thought I’d inquire.

Is it correct to say that:

During any period in which government deficit spending is insufficient to support savings desires, the private sector will dissave until either deficits increase or the private sector’s increasing debt burden triggers a finance crisis?

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