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View Diary: You can't borrow your way out of debt- what? (44 comments)

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  •  no (3+ / 0-)
    Recommended by:
    doroma, jan4insight, happymisanthropy

    Of course we have good sources of income.

    And teachers are a good example of public employees who increase national income.

    self-appointed intellectual cop

    by citizen k on Sun May 12, 2013 at 05:02:50 PM PDT

    [ Parent ]

    •  Teachers and GDP (0+ / 0-)

      Sadly, I was out the day they explained how teachers increase GDP. Does this mean that paying teacher salaries is an investment that will have an immediate effect on the economy? That's not easy to see.

      But if not immediate, how far in the future? If not immediate, does that still qualify as Keynesian pump-priming in order to get the economy moving again?

      And BTW, if "investment" in teachers pays off in increased national income, would hiring twice as many teachers as we now have result in a doubling of that payoff? You wouldn't have any actual studies demonstrating any of this, would you?

      •  it's pretty simple (2+ / 0-)
        Recommended by:
        ConnectTheDotsUSA, eyesoars

        Short term: by paying teachers you increase the size of the market for goods and services, since the teachers buy goods and services and pay taxes. All this keeps the economy going and if you can even increase the number of teachers, you can stimulate the productive economy. For example, Apple will sell its products to employed teachers and will employ engineers and marketing people and so on. All this is pretty immediate.

        Longer term:  If you need proof that an illiterate, science ignorant, innumerate population won't create as much wealth or be able to fulfill their duties as citizens as well as a well educated one, then I'm going to write you off.

        self-appointed intellectual cop

        by citizen k on Sun May 12, 2013 at 06:17:03 PM PDT

        [ Parent ]

        •  Simply providing salaries (0+ / 0-)

          is emphatically not what Keynes had in mind by stimulus—as opposed to spending on labor-intensive infrastructure projects. If all you do is pay some salaries, that's a pretty unconcentrated, weak and limited "jolt." Building new roads, that's got both the effect of the spending of labor's salaries and then the immediate commercial benefit of the road. As for the longer term, that's the time in which, as Keynes famously noted, we are dead.

          •  actually that is 100% incorrect (1+ / 0-)
            Recommended by:
            eyesoars

            as per the famous example of burying money and paying companies to dig it up.

            Keynes observed that even makework has a stimulative effect by increasing consumption. In a recession/depression the first objective of economic policy should be to stop the cycle of economic decline by creating counter cyclical demand.

            But clearly an educated workforce is valuable.  Only economists would pretend not to understand why.

            As for the long run: Keynes observation was about the weakness of Marshallian economics in which one justifies the assumption of  stability by claiming such minor effects as depressions are momentary blips.  He was not at all advocating the kind of slash-and-burn economics practiced by Ronald Reagan or Alan Greenspan.

            self-appointed intellectual cop

            by citizen k on Sun May 12, 2013 at 07:39:59 PM PDT

            [ Parent ]

            •  101% off the mark (0+ / 0-)

              "Even makework," i.e., a lesser-quality alternative.

              Surely, an educated workforce is valuable. Putting money into education is not, however, much of an immediate stimulus, which was the original topic.

              No one here mentioned anything like "slash and burn" economics, and I have no idea what you're on about.

              Oh, yes. My use of "long term" was what passes for mild humor based on the post I was responding to. So sorry it went right by you.

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