British economist John Maynard Keynes saw a role for Government in an Economy. Government should be the "buyer/employer" of last resort, when all other buyers/employers are waiting it out, for 'less rainier' days. In Keynes view, Government has a role in fueling an Economy, and should not be a passive bystander -- or worse yet the constant rainstorm, putting out the flames of economic activity ... like the Sequester Cuts are currently doing.
Keynesian economics advocates a mixed economy -- predominantly private sector, but with a role for government intervention during recessions.
Keynesian economics served as the standard economic model in the developed nations during the later part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the oil shock and resulting stagflation of the 1970s. The advent of the global financial crisis in 2008 has caused a resurgence in Keynesian thought.
Why the Recovery Has Been So Miserable in 2 Charts
by Matthew O'Brien, TheAtlantic.com -- Jun 27 2013
So why hasn't this recovery felt like one? Well, for one, households have had a helluva debt hangover from the housing bust that's left them struggling to pay back what they already owe, rather than borrowing more; for another, the financial system's near-cardiac arrest has made banks wary of lending, and businesses wary of investing. Or, as Keynes might put it, Lehmangeddon has robbed us of our risk-taking animal spirits -- and aggregate demand.
[...] But, aside from weak consumer spending, there are two culprits for our remarkably consistent and consistently unremarkable recovery: housing and austerity. As you can see below, construction of single-family homes the past four years has lagged every other post-1970 recovery. Now, multifamily building has made up for this a bit the past few years, but not nearly enough to power quicker GDP growth.
[...] Between the stimulus fading out, state and local cuts, the debt ceiling deal, and sequestration, overall government spending has fallen 6.3 percent since June 2009. It rose 21.6 percent during the mythologized Reagan recovery of 1982.
By the way, if I remember my Econ 212 course work correctly, "aggregate demand" which drives an Economy, is itself largely driven by the confidence of the people with good paying jobs. A strong "aggregate demand" means that people are not are not afraid to invest in their families and futures -- ie. not afraid to buy stuff. This confidence is largely driven by their jobs, and general economic growth outlook, in the immediate years ahead.
That weakness in the 'aggregate housing demand' -- is the direct expression of this lack of consumer confidence in the economy, in general. Most people don't run out and buy homes (or upgrade their homes), when they don't know what the future holds. (Or what the Bankers will do to us, next ...)
And by cutting even more "government spending" -- removing more fuel from the economic fire -- we are projecting a sure-fire way to keep dampened any expectations of robust economic growth, anytime soon.
Even the IMF has some serious doubts about the wisdom of American Austerity -- who knew the IMF were Keynesians at their core.
by Daniel DeFraia, globalpost.com -- July 7, 2013
"The budgetary procedure that is in place in the United States, which leads to a budgetary adjustment, seems to us absolutely inappropriate ... because it blindly affects certain expenditures that are essential to support medium and long term growth," [IMF Chief Christine] Lagarde said [at an economists' conference in France].
This is not the first time the IMF has criticized the US budget in such a public manner. Back in June, the international organization of more than 180 nations called on the US government to stop sweeping budget cuts that have affected its military, flight traffic and even farmers. It called the sequestration "excessively rapid and ill-designed."
In its annual report the IMF set US economic growth to about 1.9 percent in 2013. But the group added that the largest economy in the world could grow an additional 1.75 percentage points if the US altered its fiscal policy, specifically the sequester.
"Absolutely inappropriate, excessively rapid, and ill-designed" -- that sound like a recipe for ummm, 'economic stagnation.'
[ Source -- Oliver Twist and the Public Works Department | San Miguel Reeper smreeper.wordpress.com ]
"May we have another bowl of sequester-porridge, please sir?"
"Why certainly beggarts! With this near-negative growth, we can never have too much of that subsistence gruel," say the anti-Keynesian porridge masters ...
Porridge is fine for the short-term ... but in the long run, we need something more substantial. We need career-oriented Jobs -- we need a well mapped out Economic Future, one that solves the problems that need to be solved ...
Sometimes you want to stoke the fire; sometimes you want to un-stoke it.
When so many people need work, when so much stuff needs repair, when so many future threats need fixing, NOW -- these are the times for the Government to stack up the Keynesian firewood -- and then start stoking our economic engines.
Of course, with our dysfunctional Government -- they rarely ever can agree on 'what is a good time' for anything, anymore ... except for their 'grueling' vacation schedules, that is.
by Michael O'Brien, Political Reporter, NBC News -- July 5, 2013
[...]Don't you just love it when politicians play semantic games with peoples' lives; when they say one thing, but do another.
Despite dire warnings about the effect of the ongoing sequester -- the automatic, indiscriminate cuts to federal spending that were enacted earlier this year -- the economy continues to add jobs, though not at the type of robust pace that would be needed to further reduce the unemployment rate.
But Republicans seized on some indicators of persistent economic weakness in the jobs report, namely a surge in part-time workers reflected in the statistics, and an uptick in the U-6 unemployment rate from 13.8 percent in May to 14.3 percent in June. The U-6 rate is a broader measure of unemployment, which includes discouraged workers and the underemployed.
“There’s some good news in this report, but economic growth is still tepid, the unemployment rate is far too high, and the president continues to promote policies that undermine robust job creation,” said House Speaker John Boehner, R-Ohio, in a statement.
When they talk about Jobs as being their "Top Priority," and then do absolutely nothing tangible to put actual people back to actual work ...
Ask the Number One GOP Jobs promoter himself, Mr Boehner, how he plans to 'fuel' all those Jobs, Jobs, Jobs:
Posted by Speaker Boehner's Press Office -- May 22, 2013
Helping to build a stronger, healthier economy for all Americans is priority number one for House Republicans. The Republican Plan for Economic Growth and Jobs is a straightforward set of conservative solutions that will help create new jobs today, make life work for families across the country, and expand opportunity for everyone -- without expanding government.
The Republican Plan for Economic Growth and Jobs has 10 areas of focus -- everything from controlling spending and balancing the budget, to lowering health care costs and reining in red tape, to responsible oversight of out-of-control government agencies like the IRS (chief enforcer of the tax code we want to simplify and the president’s health care law which we believe needs to be fully repealed).
“This House is going to continue to be focused on the issue of jobs,” said Speaker Boehner. Learn more about our plan at GOP.gov/jobs and stay tuned in the months ahead.
The House GOP Plan For Economic Growth & Jobs
An "all of the above" approach [...]
Lowering Health Care Costs & Bolstering Research
Repealing ObamaCare [...]
Expanding Education Opportunity
Reforming federal education policies to empower parents with choice [...]
Simplifying the Tax Code
A simpler, flatter tax code [...]
Stopping wasteful spending [...]
Keeping the Internet free from government regulation, stopping cyber-attacks [...]
Reforming Immigration & Border Security
Securing our borders, enforcing our laws [...]
Reining in Red Tape
Removing artificial government barriers and red tape [...]
Expanding Markets for Manufacturers & Small Businesses
Opening new markets for American-made goods [...]
Stopping Waste & Fixing Broken Government
Responsible oversight of government operations will help remove obstacles to growth and ensure accountability for taxpayers.
Funny isn't it, how investing in Infrastructure Jobs didn't even make the GOP Top Ten priorities in that GOP's "Job Plan" -- a plan better named the Republican Plan for More Economic Profits for the Job With-holders.
Funny how the only Jobs addressed by their Job Plan's priorities are related only to increasing profits and increasing their election chances. Most of those GOP Job Priorities -- if implemented -- would put even more "public workers" out of work, put more people in the unemployment lines -- and so further empower corporations to keep profiting off of our
poverty desperation. And all without all that pesky government interference to protect the environment, to end the industrial wastelands, to ensure Corporate Persons pay their fair share in Taxes, either. That's some plan.
Now we can't have what Keynes wanted -- actual Jobs for the Unemployed -- because in the GOP worldview, Keynes is the nemesis of the 'Job Creators' -- those mythical Reaganomics entrepreneurs that keeps all fires lit, all homes happy, and all Americans gainfully and confidently employed. (Whoops, there goes that damn tide again!)
Besides, if they let those
commie 'socialist' Keynesians actually employ the unemployed, repair the broken infrastructure, fix the many looming threats due to the Climate Crisis -- then what leverage would the privateer 'Job Creators' have left, to hold all those things in check; to dole them out on their own time-table; to extract their maximum rates of return?
British economist John Maynard Keynes, if he were still around today, would probably Sequester cut -- the hell out of those excessive Corporate Tax Breaks. And then start a Federal Jobs Program for out of work CEO's too. Surely they must have one or two skills left worth leveraging, eh? I hear they're pretty good at "sweeping stuff under the long-run rug."
Quick someone hand them a broom ... which would certainly be preferably to that unending fire-hose, that they now austerely employ. To dampen all hope of a robust recovery anytime soon.