Stimulus spending to increase the deficit is always a diversion from business spending, and not an increase in spending in total. It therefore always causes unemployment. I’ll say that again: STIMULUS SPENDING ALWAYS CAUSES UNEMPLOYMENT DIRECTLY. It did so this time around in Australia. It did so this time around in the the US particularly. It did so during the depression in the US. This ought to be so incredibly obvious but somehow we have had a different model of spending flows injected into our head. Slashing government spending would create private employment almost right away so long as there was sufficient wage restraint, and so long as proper monetary policy (not, for fucksakes, interest rate subsidies, or other bank subsidies, which are not monetary policy but fundamentally a crime) quickly brought total business revenues (NOT! for fucksakes GDP) back up to the level it peaked at prior to the financial collapse.
They are self-evident.
Do you not believe that if you made me central banker with new money creation powers, and control over the reserve asset ratio THAT I COULD HIT ANY GROSS DOMESTIC REVENUE TARGET I DECIDED ON?
Do you not believe that?
So I can get all the cash printed I want. Buy back all the bonds or set up a factoring outfit for local governments in debt… or both …….. ?
And at the same time I can raise the reserve asset ratio whenever I felt like it?????
And I’ve statistics graduates charging around my office. Is your claim that I CANNOT hit the nominal spending target I’m after?
No of course you are not claiming that. Because it would be stupid to claim that. Because any one of us, with a few near misses, could get adept at hitting the target we had set for ourselves, under such an idyllic setup.
So what I am saying IS-IN-FACT self-evident. And I’m sorry you had to hear it from me but we have no time for this rubbish anymore its not funny anymore our most important ally is being trashed from the inside and DO YOU WANT TO FIGHT because I don’t!!!!!!!
Now the truth is that government spending doesn’t increase total spending. But so what if it did? I suppose that if I’m going to be creative about it I could INVENT SPECIFIC SCENARIOS wherein we could conduct fiscal policy in such a way that we’d get some tiny paltry increase in gross business revenues. BUT SO WHAT?
Lock it in brother: We’ve already established that we can hit any spending target we are looking to hit with the only valid monetary policy mix available.
Once you internalize that you will realise that what I’m saying is indeed self-evident. And obviously so. And if you cannot see it its time for you to order your Schaum’s outline series on logic, and not get back to economics until you’ve been through it twice.
Listen to Little Bill Dagget. He says there is no Keynesian Whores Gold. And even if there was you wouldn’t want to be looking for it.