Thought Id start this one going because its rather dead on this board at the moment and I suppose all my usual muckers are either at the Stella tennis event watching Dim Tim (lose again) or at Henly Regatta eating cucumber sandwiches (they wish,...NOT).

Anyway please feel free to just talk to yourself blast away and let it go on any company or subject you wish. Just wish Id thought of this one before.

cheers GF.

Anyway Im calling it quits.

I can smell the John Smiths on the air like a March Hare.

Its all around me and Im getting shiffty feet. Crappy Christmas is past thank god, its a new year to savour.

See ya next year grumpy old git........wink.

Living standards always lag behind economic recovery.

Keynes is all about government intervention and generating work by digging a hole and filling it in again. France is trying that method and it is failing miserably. It is the policy that left wing governments use on the way to leaving us in debt.

i think you're wrong - and i suppose that means keynes too, if you have that 100% right - when it comes to recovering from a recession such as we have just been going through ....... unless you're going to have unbridled exchequer borrowing, though we all know the disaster that brings in its wake

however, i'ld certainly accept that once an economy is back on an even keel, then domestic demand will indeed be able to keep that growth going without (i think) provoking wild inflation

btw, i've never read what GO has to say on this issue, and indeed on very few others

Absolute tosh.

Their is an argument where you increase benefits to very high levels and the bottom up multiplyers in the economy plus the accelerator redistribute that wealth and the lower living working classes propensity to spend increase M1 M2 and M4, in other words the money supply flows faster and economic growth lags standards of living, the downside being the chances of inflation increasing later down the track.

have you written english above, or is it just c+p gobbledegook or perhaps even your own gobbledegook?

Hays totaly wrong on Keynes read the book again.

Cyners its economic drift.

Unlike you and Hays I have a PHD in economics.

That doesnt mean Im always right but put it this way would you ask a labourer do do a plumbers job.

meanwhile, while you go off down the boozer, some of us have to keep generating income for the economy - i'm in the office!

Well open that bottle of scotch you have in the bottom drawer LOL.

Happy New Year, Im off now.

Happy new year Hays.

Happy New Year All

in that case, please try explaining yourself in english for poor mortals such as myself
and if you are basically saying a country can spend, spend, spend and borrow, borrow, borrow it's way out of recession, then history shows that is a very short-term solution with horrid consequences - even if usa seems to be able to support(??) and ever-burgeoning budget deficit

i'ld very happily share a drink with you sticky, as you well know :-)

Actually happy birthday. It is my birthday today.

Keynes theory is based on TOTAL spending in an economy and its effects on output and inflation. We are in a situation where spending is currently being cut at government level so not at total spending by any means (could change with a Labour government though).
Keynesian Economics is based on a circular flow of money, which refers to the idea that when spending increases in an economy, earnings also increase, which can lead to even more spending and earnings. This money flow is probally better seen in the poorer segments of society as if you give the poor some money they will probally spend it as opposed to the wealthy which is why we have such a redistribution of wealth in the country.. If your going to read Keynes then you should also read Hayek in my opionion.

sure "total spending" is self-evidently shrinking, not only because the gov't is trying to restore a semblance of sanity and prudence to the economy - whether they are carrying out that excercise correctly is not the issue here - but the public at large is patently not spending; it can't because many are out of work and even those that are not, are having their purses badly squeezed

The aspproach of Keynes is that you spend money that you don't have to improve the money in people's pockets. That will create demand and improve the economy. That leads to sharp inflation and heavy borrowing. Plus there is always the risk that it may not work. That will result in more debt and the problem still unsolved.

The method used by Osborne is a market led solution, where supply side policies encourage growth of private businesses. The Keynesian approach spend on government projects to stimulate the economy. The choice is one of ideology. The Keynesian approach has been out of favour for many years.

The only long term solution is the expansion of private business. That is the source of all wealth for the country. Osborne is trying to cut back on government spending and Labour wants to increas it.

thank you for the enlightenment

Thatcher was a big fan of Hayek.

This comment on the BBC web site seems appropriate.

The economy is like a drunk throwing up the morning after the night before.

It is disgorging itself - or trying to disgorge itself - of bad investments it was tempted to undertake largely because of easy money.

Giving it still more money will not prevent the inevitable suffering.

It might mask or delay it somewhat, but only at the cost of more suffering later.

This is not the sort of advice that governments welcome.

They want a painless, easy cure like the one Keynesians offer.

But, as Hayekians warned again and again, there is no painless recovery from an unsustainable boom.

The only way to have no pain is to avoid the boom itself.

The biggest problem to Keynes is that the theory was written long before big corporations existed. If say 100 miners got a Christmas bonus back in 1920 then they might spend it in the pub, the green grocers or any number or stores, the money received the multiplier effect and rippled outwards in the economy. Today the same bonus would more likely end up spent in a single shop (eg Tesco) and be banked. No multiplier effect through the economy. The real count I suppose is how many times money is spent/moved from one owner to another before being changed from bank cash to a bank deposit. The longer it remains cash the more it can be spent.

Happy Birthday, Haystack. Enjoy!