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.

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!

Today, if you gave poorer people a bonus, it would probably be absorbed by their debts such as credit cards, wonga, overdraft and not get spent on anything.

thank goodness for a few posts that this poor mutt can comprehend

Your not wrong there Haystack... It proves the point though that Keynesian theory is out of date to some extent as it was written at a time when corporations didn't rule the economy. Back in the 1920's where would you have borrowed money easily from?

Cynic, no degree of study can compete with commonsense grounding when investing!!
Just for you I've dug out a rather nice article, link below.
http://www.bbc.co.uk/news/business-19706272

an interesting article shortie, but all it does is reinforce what we all know - no one, especially politicians, has a clue as to how their policies will actually turn out .... and of course there's no action replay to try the alternative!

nevertheless, my gut feeling is that the tough measures that were taken and we have all had to endure, were far and away the best way ...... the drip, drip, drip austerity measures proposed by "the party opposite" may have proved more popular, but in my very uneducated opinion, such a policy would have been truly grim in the long term

Cynic, the free market approach says "if you can't pay then you can't buy", the coalition have ensured that "we can pay and will buy"... Tough measures taken, I think though measures are still to come...

Even the Labour party has said they will make cuts if elected, but they won't give details.

Hays.

When I read Post 34763 I thought you were writing writing of what some expected of members of the Old Bullingdon Club members.

Also, I think some of the economic rubbish written here is equivalent to a pile of old Cynic which should have been buried a long time ago.

A pity the whole cabinet didn't go through the Bullingdon Prison regime.

Which ever is the quickest path out of Europe will win my vote as I see this as our countries first priority..

shortie - so you wouldn't even buy into the idea of a renegotiating treaty of rome?

fossy - well, you're just fos!

As usual with the bone headed "Con" Artists on here you conveniently forget the word "balance" in your one sided rhetoric.

As opposed to soft in the head lefties.