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Overnight Hope-a-Dope

374
Scion91/25/2009 2:46:31 am PST

re: #360 littleoldlady

Yeah; the entire point of a ‘stimulus’ is to cause inflation essentially, if you are going straight by Lord Keynes. People are ‘stimulated’ to spend and sell because it becomes detrimental to either sit on liquid assets or excess manufactured goods as both are depreciating in value as ‘new’ money is minted. Confiscatory redistribution without deliberate inflation only encourages those near the middle and bottom of the economic ladder to consume.

At least, that is the way it is supposed to work. However, I believe that like the Chicago school, the whole thing is a bit flawed because it relies on predicting the behavior of massive populations to work (or in the case of Keynes, ‘stimulating’ massive populations towards behaving a certain way with their money). I’m very skeptical that economists are truly capable of grasping the potential for a population to work against its own interest, and generally be economically illiterate. Basing our system off of pretending to know how the world is going to react to control (or lack thereof) being exerted over the economy is a bad idea from where I am standing.