Sunday listening

[Canuck_2]

Some thoughts about economics in this half hour radio program.

Interesting listening no matter what your economic theories might be.

When financial times are tough, individuals and families tend to tighten their belts, and try to use their money more frugally. You'll sometimes hear politicians saying governments should do the same - pledging austerity budgets, and restrained spending.
But there is a concept in economics called The Paradox of Thrift.

It's the idea that when everyone in an economy saves money, all at the same time, it can actually result in a loss of savings. If no one's spending, then no one's earning either.
That's why economists who follow the theories of John Maynard Keynes advocate for governments to get more involved in times of economic downturn. Keynesians favour job-creation and stimulus spending over austerity.
This week, we'll learn why Yale economist Robert Shiller says the Paradox of Thrift, a troubledbaby-sitting co-op, and an 18th-century poem, could provide good models for today's discussions of global economics.

http://www.cbc.ca/theinvisiblehand/episodes/2012/08/15/episode-eight-the-paradox-of-thrift/

[r3020]

There is no need to earn money when the government gives it to you. Thus you get the Greek situation. No one is willing to buy your debt.

[Taylor ECIL]

http://en.wikipedia.org/wiki/Cloward%E2%80%93Piven_strategy

Cloward Piven strategy sounds like where we are heading right now.

[gough whitlam]

Canusk is dead right.  This country faced the same as the US but on a much smaller scale.  We stimulated with about 45 billion in much the same areas to save jobs and businesses and we came out without a dent so far but time will tell.  It is as simple as if the people stop spending, business go broke, sack employees who go on the dole who do not have money to spend and bludge on the taxpayer.   Sound familiar over there?

I wonder if the repigs would have been more enthusiastic if Bush had to do the same as Obama.   Yeah - I thought so.

[Canuck_2]

Gough, I think they are so enthralled with punishing the unfortunate and haveing the rich accumulate more they can not see the whole picture.

The program mentions how so few owned so much going into the 'Great Depression' just like today.

I was born just after the hard times of the thirties but my parents passed on much info about it.

They often mentioned how there just was no money around. No one had any cash. Much was done by barter because no one had cash to spend and the few who did have money in theor bank and pockets lived like royalty on little exspenditure because their money could buy so much.

The 'paradox of thrift' seemed to fit quite well what I remember my parents talking of.

[Canuck_2]

So what is the option and plan if your government quits giving money to you?

What will the person who is disabled and unable to work do? What about the old and unable do?

Do you plan on just letting them starve on the streets?

How will that help?

Yes I can see cutting off the farmers from all that government largess and let them live by the market like the rest of us instead of being subsidized to dump product in our markets.

A number of businesses could be more market oriented with out government subsidies too.

Why does a factory close in Canada and move to a factory in the US where they forgive their taxes for a number of years? unless that is also a subsidy not free market forces.

So are you really wanting to stop all government money to all people and companies or just the old, frail, disabled and poor?

[kraft-t]

300000 teachers lid off and evidently that is good for the economy and the schools. Repubs are using this unfortunate economic recession to attack everything they are against. Seniors, labor, school teachers, the unemployed, the young and poor. nursing home residents Big Byrd, NPR, and most of all unions.

Businesses, financial markets, the Mitt romneys are annoyed that Obama won't continue giving them all they want and more. Enough is never enough and to ask them to do more is an sacrilege. Yet asking the poor or retired to make do with less that is just business as usual.

[r3020]

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@Canuck_2 wrote:

So what is the option and plan if your government quits giving money to you?

What will the person who is disabled and unable to work do? What about the old and unable do?

Do you plan on just letting them starve on the streets?

How will that help?

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These are the ones who truly need help. These are also the ones private charities target and help them very effectively. The government is effective at things like Solyndra and the Chevy volt. We need to help the truly needy, not provide a golden parachute retirement to those who work for 30 years. They are the ones who can take care of themselves. Helping those who do not need help takes from those who do. Look at Greece, France, and Spain, they can help no one because no one is willing to buy their debt. They have run out of other people's money. Socialism fails because when people can get something for nothing they contribute nothing.

[r3020]

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@kraft-t wrote:

300000 teachers lid off and evidently that is good for the economy and the schools. Repubs are using this unfortunate economic recession to attack everything they are against. Seniors, labor, school teachers, the unemployed, the young and poor. nursing home residents Big Byrd, NPR, and most of all unions.

Businesses, financial markets, the Mitt romneys are annoyed that Obama won't continue giving them all they want and more. Enough is never enough and to ask them to do more is an sacrilege. Yet asking the poor or retired to make do with less that is just business as usual.

---

Teachers are a state issue, not a federal issue.

[Canuck_2]

So you propose what?

Cutting off everyone or just those that already have resources?

How do you determine which is who?

The premise of the program I linked to was that cutting back in an economic downturn would lead to even more economic problems.

I have noted before that the time to cut back is when the economy is charging ahead not when it is sinking.

As for Greece many of its problems could be solved by collecting the taxes that people are supposed to be paying. Way too many people in Greece evade the tax system. Check the stories on their tax evasion problem.

And before you blanket condemn 'socialism' read this article about Norway

The global financial crisis has brought low the economies of just about every country on earth. But not Norway.

With a quirky contrariness as deeply etched in the national character as the fjords carved into its rugged landscape, Norway has thrived by going its own way. When others splurged, it saved. When others sought to limit the role of government, Norway strengthened its cradle-to-grave welfare state.

And in the midst of the worst global downturn since the Depression, Norway’s economy grew last year by just under 3 percent. The government enjoys a budget surplus of 11 percent.

http://www.nytimes.com/2009/05/14/business/global/14frugal.html?_r=3&em