Posted by: graemebird | July 28, 2009

YOU MUST CUT SPENDING TO END A RECESSION:Throwing Down The Gauntlet At Catallaxy.

“In fact Mark, Lambert, Bird and Homer should all sit in a couple of years of economics classes and try and learn something.

Imagine that. The Four of them sitting in eco 1 at the front of the class. Birdie would end up killing the other three. Each day there would be one less attendee until only Bird was showing up.”

I am the authority on economics on this blog and I will yield only possibly to Kates who is something of an unknown quantity.

I am the authority on economics on this blog because I have never fallen for any of the bullshit fallacious economics that all the rest of you have fallen for (Kates for the moment alone excepted) one time or another on this blog.

And CAMBRIAS continued lying to third parties….. lying which third parties do tend to readily except, even if they are smart and righteous (tal a case in point) has lead me to the decision right here right now to throw down the gauntlet.

I knew before I finished my degree, which was prior to all of the rest of you Kates alone excepted, that the way to deal with a recession FISCALLY was through ruthless spending cuts. Ruthless not to the sick or the old. But ruthless spending cuts to bureaucracies and projects that represent investments in taxeater ego.

Now I knew that slashing spending and asking consumers to try and save as much as they can, and pay down their debts, was the way to deal with recession… I knew this PRIOR to completing my degree.

And somehow none of you seem to know that even now all these years later.

What I did not know then is that the good effects WILL be instantaneous. I didn’t have the full spectrum view of Reisman and Jackson. So I accepted the idea that I had to preface my prescription with IN THE LONG RUN…. if you don’t get the monetary policy right.

But now I see that this long-run short-run nonsense is just a statistical artifice which comes from looking at the wrong metric for the problem at hand.

Now Cambria could have secretly repented. He could have stopped the bullshit and waited for me to come around and stop insulting him. He could have admitted that he was wrong to be in favour of the sort of thieving that Paulsons PARTICULAR bailout plans represented. He could have admitted that he doesn’t know enough about the oosmos to rule in or out some of the ideas I was putting forth to a public bludgeoned by small-minded ideologues. And he could have laid off trying to bullshit people on what I am good at. What I’m truly gifted at. What I’m the best at to my knowledge Jackson and Reisman excepted.

And that is telling good sense from nonsense in the field of economic science.

Now here I throw down the gauntlet. I’m open to negotiation on the scope of tax cuts to end a recession. I’m open to negotiation on the level of business spending the central bank ought to try and hit by the cash injection and reserve asset ratio combination. I’m open to negotiation on what level of nominal gross domestic revenue they target using these two measures and these two measures alone. I’m not open to negotiation on targeting that level of spending by anything other than these two methods alone but that is besides the point. Since the argument I’m concentrating is on GOVERNMENT AND CONSUMER SPENDING.

But what I’m not open to negotiation about is the idea that you must CUT GOVERNMENT SPENDING AND ASK CONSUMERS TO SAVE AND PAY DOWN DEBT as the way of getting out of a recession.

I have many times explained my reasons why this is the only way to do things consistent with rigourous human reason.

I have been gainsayed and yet without a stitch of a contrary case being made.

Kates do not stay neutral on this. And Sinclair. You set the opposition up for the knockout, and then you refuse to throw the punch. Redeem yourself by backing me up on this one argument and your siding with Humprheys may be forgiven…. if not quite forgotten.

So the gauntlet is thrown down. We need evidence that a desperate drive for government spending cuts on all three levels and moral suasion to get consumers to save

((((((and if possible backed up by tax changes. To increase the amount of money retained in businesses))))

(((( Not sent out to shareholders as dividends until times are a bit better. Not spent on wage increases or bonuses until the recession is over.)))

And for the love of God not frittered away by asking your people to splurge the money on consumer spending.

The challenge is now laid down. It ought to be met one way or another. To lift us out of this Club Troppo-like tyranny. One which has allowed a group of idiots to scuttle the prospects of our most important ally right before our very eyes.

28 Jul 09 at 4:54 pm


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