That is mad, Garg. I love it!
Austrian Economics vs. Keynesian Economics in Axis and Allies
-
Yes - but you are forgetting dollar-denominated debt.
Most debt (including US Gov’t debt) is held in dollars. By doubling the nominal value, you are in effect halving your debt.
-
The debt isn’t inflation adjusted :-o :-o :-o
Wow. -
Hence the phrase, “inflate your way out of debt”
It is not a pretty sight in the short run (Weimar Republic, Argentina).
-
How do other countries not see this, since the exchange rate is inflation-adjusted?
-
The underlying assumption has been (falsely, in my view) that US Gov’t obligations are “risk-free” for much of the 20th and 21st centuries.
Heavy inflation is a curse and a blessing. If done properly, it allows payment of foreign debt and cheapens your cost of doing business (labor, etc) relative to other countries, allowing for more export which in turn eventually stabilizes inflation. The curse is that individual people see their bargaining (purchasing) power drop dramatically.
-
Yes, inflation by the Fed is a good tool, IF the government uses it correctly. I presume that you and other Austrians don’t really trust the gov’t to be able to do a good job at that, correct?
-
The problem is not economics, it’s politics. Today we have:
- Two party system (both in USA and in Europe). That means that alternate ideas that could aid to solve problems cannot reach the government. As the two mayor parties seem the same in economics (again, both in USA and Europe), the truth is that people cannot choose the economic politic
- Non proportional elections (both in USA and Europe). Is insane that a guy can be elected president with less popular votes than another guy in a presidential system (USA) and is insane that a party can have more representatives that another that got more popular votes (Europe)
- Discipline of vote (rigid only to Europe) and closed lists (both I think). Representatives are chosen by the party, not by the people, and so they do things that serve to the party and not to the people
That we need is more democracy, not less as we saw in Greece and Spain (stingy ZP, you traitor). Also, we need control financial power somehow (now it has free reign worldwide). I know the Austrian school a bit and I think they are totally wrong, but we need able politicians first or any solution we try is damned to fail utterly. Current situation only serves to give more power to the powerful (financial power, that has governments as puppets) and less to the common people
A politics thread (economics = politics ) … interesting indeed but will be closed soon or later
-
I think reps are only chosen by the party in parliamentary systems. In the US, everyone votes for a Rep, a Senator, and the President
-
However, I agree with the rest of what you said. I’d like to add that rich people/corporations are able to bribe polititions, and thus we have a plutocracy instead of a democracy
-
I think reps are only chosen by the party in parliamentary systems
That’s true (agreed as well about the bribing and the plutocracy)
-
I think the only way of changing the things is voting any party that is not one of the mayors and better voting one that wants change the electoral system to a more democratic one. That would mean voting any party different to Dems and Reps in USA, any different to PSOE and PP in Spain, any different to laborists and conservatives in UK, etc. That’s the only non-futile vote, and we saw a bit of that in UK (there, a third party won enough representatives to force the conservatives a minor change in the electoral system. Its a small step, but we need start walking as soon as we can)
-
I think the only way of changing the things is voting any party that is not one of the mayors and better voting one that wants change the electoral system to a more democratic one. That would mean voting any party different to Dems and Reps in USA, any different to PSOE and PP in Spain, any different to laborists and conservatives in UK, etc. That’s the only non-futile vote, and we saw a bit of that in UK (there, a third party won enough representatives to force the conservatives a minor change in the electoral system. Its a small step, but we need start walking as soon as we can)
What’s PSOE and PP stand for(and English translations, please)
Yeah, the Lib Dems were key in the UK. However, what’s to prevent a 3rd party from taking bribes?
-
Thaught you guys might like this
-
Imagine the look on the face of the Axis player when the US builds a navy with 4 battleships, 3AC, 5 destroyers, 10 subs, and 20 transports, on EACH coast on move 1! The war is not in doubt now.
Great economic parody. I hate to be a spoil sport but the US would run into factory build limits in any game but A&A Classic.
-
but we need able politicians first or any solution we try is damned to fail utterly.
Ah, the classic argument - we need better people!
Funcioneta, I agree with many of your points, but you tend to draw the wrong conclusions. Government is corrupt I agree. Your solution is better politicians, mine is less government. Power corrupts, and the more power granted to one entity the more corruption possible. The beauty of economics is that individual forces acting for themselves bring about that which you want.
Does government have a role? Of course! We need government for basic services, such as courts, roads, police and fire, etc, and also a limited framework to eliminate monopolies and cartels in business.
One other point about your more democracy comment I agree we need more educated democracy. The problem is a large percentage of voters are apathetic and vote for whatever name they remember best. Also, few people have any idea of economic principles and tend to vote for nice sounding ideas with disastrous consequences.
Ill give two examples: Minimum wage and welfare. Minimum wage is a great idea in principle (workers should be paid a living wage, sufficient to provide for a family). In practice, however, it leads to massive under-employment. Why? The prime beneficiary of minimum wage jobs is teenagers and college students (over 50% in the US). At a minimum wage job, you learn vital skills and build experience for a real job further down the road (historical equivalent apprentice). When you institute a minimum wage, you condemn many of these youths to no job whatsoever, with disastrous results for the future.
Welfare is similar it is a give a fish instead of teach to fish idea. If all unemployed people are given welfare sufficient to cover their expenses, what incentive is there to work (or build job skills?). Sadly, many people here in the US in their 20s and 30s are on welfare, doing nothing and collecting checks from the Government. While this is sustainable in the short term, they are really harming themselves in the long run, as they are supposed to be earning wages and saving during those years so as to pay for their retirement in the future. Such a scheme eventually collapses, with dire results for all (Greece). I draw the parallel of a wild and a captive tiger. A captive tiger, once born and reared in a zoo, can never be released to the wild, as he does not have the requisite skills to survive. The captive tiger is the modern day welfare recipient would you set them free?
-
For welfare, the incentive to work is to earn more, since unemployment benefits are less I think than MW.
For MW, I’m not sure that’s empirically true, and I think different studies conflict with each other.
Less government is all well and good, but of course, we need a gov’t for the military, infrastructure, ans, as some argue, health care, economic crises, and a social saftey net
-
Not if welfare is set at too high a point - it is a catch-22.
For many parts of the country, the standard of living is low enough that welfare is a comparable substitute. Think about it - Welfare pays $1500 a month, while a job pays $2300 (both examples).
After taxes, transportation costs, time involved in commuting, AND time spent working is factored in - which would you rather do?
In many cases, welfare pays MORE than a comparable job that welfare recipients could earn. I am speaking from personal experience, by the way… I have met several people who have turned down job offers to remain on welfare.
We agree on the basics of Government - Military, Infrastructure. The rest is a pure power grab.
-
I see. But on the other hand, since there is a natural unempoyment of 5-6%, if you remove too much, people will stay poor. The challenge is finding the correct amount, and this is subject to change over time.
-
There will always be temporary unemployment - people changing jobs, getting more education, temporary layoffs. The key is to minimize permanent unemployment, which is devastating to an economy.
Feel free to message me at any point if you have any questions about any economic issue - the subject is extremely important and affects each one of us, every day of our lives.
-
I think we agree that we need some government and some welfare, we just disagree on how much. It’s interesting that many people whose beliefs seem very different(e.g. conservatives and liberals) agree on things, but disagree on the degree.
Suggested Topics
