I'm sure an amateur Austrian economist as bright as you are can put together a much more convincing takedown of Keynesian economics.
Just don't forget the Law of Holes.
This one is accessible and an obvious illustration of the broken window fallacy, a concept baked into Keynesian economics.
There is of course more to it—Keynes was wrong about more than one thing—but this is a good starting point.
I'm not an Austrian or Australian economist but I don't see why you say he got it wrong. Sounds to me like he described the situation correctly. You might not like it. Economic stimulus by injecting money, as a concept, doesn't necessarily depend on the 'value' of the investment. But IMO that doesn't mean it is a bad concept, it is just up to the government and society to invest in things that a) are of value, and b) values that are not well factored into private investment decisions. Like environmental sustainability, defense, science, and health.
The above is the reality of our economy. 2/3 of the GDP is pure consumption. Consuming and creating waste...but it does make the world go around. So we consume, but how are we financing our consumption? Increasingly with debt financing; both at the public level (national deficit) and private level among the middle and lower classes - credit is the "steam engine" of today's US economy.
I'm no economist, but as a species it seems we move forward (create wealth?) when we create new technologies and systems that are more efficient. From this we can measure wealth in terms of leisure time, access to safe food and water... Otherwise we simply shift wealth, with my pile hopefully getting bigger than your pile, while you borrow the $ you need to consume...keep food on the table and the tv and cell phones turned on.
I guess I can think of worse things. The hole is a waste but what if, instead of buying hole-digging time, people bought Monster gold-plated speaker wire for their stereo? And threw out their old wire? The wire (either wire) might only ever carry Air Supply and Paul Harvey reruns.
The above is the reality of our economy. 2/3 of the GDP is pure consumption. Consuming and creating waste...but it does make the world go around. So we consume, but how are we financing our consumption? Increasingly with debt financing; both at the public level (national deficit) and private level among the middle and lower classes - credit is the "steam engine" of today's US economy.
I'm no economist, but as a species it seems we move forward (create wealth?) when we create new technologies and systems that are more efficient. From this we can measure wealth in terms of leisure time, access to safe food and water... Otherwise we simply shift wealth, with my pile hopefully getting bigger than your pile, while you borrow the $ you need to consume...keep food on the table and the tv and cell phones turned on.
The company that makes Cards Against Humanity solicited donations to dig a giant hole.
No reason, just dig a hole. Just to dig a hole. An utterly pointless gesture.
They raised $100,573 and dug.
I'm posting this here just to point out the absurdity of some economic orthodoxy. This exercise increased GDP because money changed hands, but resulted in a net destruction of wealth. Diesel fuel was burned, earthmovers inched closer to their ends of life, people spent hours of their lives that fed, housed, healed, and improved the lives of no one. In the end the land in which the hole was dug has—by any measure—declined in value. The earth as a whole is worse off. But John Maynard Keynes calls it a win.
I'm sure somebody will step up to declare this a net positive because the guys who drove the earthmovers got paid, the refinery workers got paid, the people who make earthmover parts will eventually get paid a bit earlier than otherwise. Money moved! Hooray!
But wealth—the sum total of resources, land, and man-hours available to useful things—declined. Mankind is worse off. The money that changed hands didn't increase, it just changed hands. Whatever productive use it would have had at the hands of its original owners will not happen. This happened instead.
This is your economy on Keynes. Any questions?
I'm sure an amateur Austrian economist as bright as you are can put together a much more convincing takedown of Keynesian economics.
I guess I can think of worse things. The hole is a waste but what if, instead of buying hole-digging time, people bought Monster gold-plated speaker wire for their stereo? And threw out their old wire? The wire (either wire) might only ever carry Air Supply and Paul Harvey reruns.
You are saying it is bad in that it there is a net loss of wealth making mankind worse off. I'm saying that they not only did it for publicity (something that can be purchased that usually is believed to lead to profit) but that they got their target market to pay for it out of the market-people's entertainment budget. So you are basically arguing that the choice people made freely is bad for mankind. Sounds like Libertarianism to me.
Libertarianism consists of not stopping them. Not interested in stopping them.
My point was purely economic; people spending absurd amounts of money to fund a basketball stadium and bribe a team to stay in town are also net destroyers of wealth, and also seen as economy-boosting measures. GDP measures only money changing hands, ignoring what that money actually bought.
And I don't even regard entertainment (which consumes resources, land, and labor but produces nothing tangible) as bad. Art is inspiration—a meta-good, an essential part of civilization. Just don't equate it (directly) with economic progress.
I guess I can think of worse things. The hole is a waste but what if, instead of buying hole-digging time, people bought Monster gold-plated speaker wire for their stereo? And threw out their old wire? The wire (either wire) might only ever carry Air Supply and Paul Harvey reruns.
You are saying it is bad in that it there is a net loss of wealth making mankind worse off. I'm saying that they not only did it for publicity (something that can be purchased that usually is believed to lead to profit) but that they got their target market to pay for it out of the market-people's entertainment budget. So you are basically arguing that the choice people made freely is bad for mankind. Sounds like Libertarianism to me.
Libertarianism consists of not stopping them. Not interested in stopping them.
My point was purely economic; people spending absurd amounts of money to fund a basketball stadium and bribe a team to stay in town are also net destroyers of wealth, and also seen as economy-boosting measures. GDP measures only money changing hands, ignoring what that money actually bought.
And I don't even regard entertainment (which consumes resources, land, and labor but produces nothing tangible) as bad. Art is inspiration—a meta-good, an essential part of civilization. Just don't equate it (directly) with economic progress.
You are saying it is bad in that it there is a net loss of wealth making mankind worse off. I'm saying that they not only did it for publicity (something that can be purchased that usually is believed to lead to profit) but that they got their target market to pay for it out of the market-people's entertainment budget. So you are basically arguing that the choice people made freely is bad for mankind.Sounds like Libertarianism to me.
I don't see it as any less productive than most entertainment industries. NBA doesn't exactly build wealth in the way you are saying. It is marketing where you get your market to to pay for it rather than forking out the money yourself. Even that isn't new - look at the T-shirt industry.
I agree that it is a waste, much like the NBA.
I'll try this one more time.
The point isn't that the event itself is good or bad. The point is that it resulted in a net loss of wealth, but the metric most commonly used to measure the economy says it grew the economy. Mankind is worse off, but the numbers look great.
You are saying it is bad in that it there is a net loss of wealth making mankind worse off. I'm saying that they not only did it for publicity (something that can be purchased that usually is believed to lead to profit) but that they got their target market to pay for it out of the market-people's entertainment budget. So you are basically arguing that the choice people made freely is bad for mankind. Sounds like Libertarianism to me.
I don't see it as any less productive than most entertainment industries. NBA doesn't exactly build wealth in the way you are saying. It is marketing where you get your market to to pay for it rather than forking out the money yourself. Even that isn't new - look at the T-shirt industry.
I agree that it is a waste, much like the NBA.
I'll try this one more time.
The point isn't that the event itself is good or bad. The point is that it resulted in a net loss of wealth, but the metric most commonly used to measure the economy says it grew the economy. Mankind is worse off, but the numbers look great.
The company that makes Cards Against Humanity solicited donations to dig a giant hole.
No reason, just dig a hole. Just to dig a hole. An utterly pointless gesture.
They raised $100,573 and dug.
I'm posting this here just to point out the absurdity of some economic orthodoxy. This exercise increased GDP because money changed hands, but resulted in a net destruction of wealth. Diesel fuel was burned, earthmovers inched closer to their ends of life, people spent hours of their lives that fed, housed, healed, and improved the lives of no one. In the end the land in which the hole was dug has—by any measure—declined in value. The earth as a whole is worse off. But John Maynard Keynes calls it a win.
I'm sure somebody will step up to declare this a net positive because the guys who drove the earthmovers got paid, the refinery workers got paid, the people who make earthmover parts will eventually get paid a bit earlier than otherwise. Money moved! Hooray!
But wealth—the sum total of resources, land, and man-hours available to useful things—declined. Mankind is worse off. The money that changed hands didn't increase, it just changed hands. Whatever productive use it would have had at the hands of its original owners will not happen. This happened instead.
This is your economy on Keynes. Any questions?
I don't see it as any less productive than most entertainment industries. NBA doesn't exactly build wealth in the way you are saying. It is marketing where you get your market to to pay for it rather than forking out the money yourself. Even that isn't new - look at the T-shirt industry.
The company that makes Cards Against Humanity solicited donations to dig a giant hole.
No reason, just dig a hole. Just to dig a hole. An utterly pointless gesture.
They raised $100,573 and dug.
I'm posting this here just to point out the absurdity of some economic orthodoxy. This exercise increased GDP because money changed hands, but resulted in a net destruction of wealth. Diesel fuel was burned, earthmovers inched closer to their ends of life, people spent hours of their lives that fed, housed, healed, and improved the lives of no one. In the end the land in which the hole was dug has—by any measure—declined in value. The earth as a whole is worse off. But John Maynard Keynes calls it a win.
I'm sure somebody will step up to declare this a net positive because the guys who drove the earthmovers got paid, the refinery workers got paid, the people who make earthmover parts will eventually get paid a bit earlier than otherwise. Money moved! Hooray!
But wealth—the sum total of resources, land, and man-hours available to useful things—declined. Mankind is worse off. The money that changed hands didn't increase, it just changed hands. Whatever productive use it would have had at the hands of its original owners will not happen. This happened instead.
OPEC reaches deal to cut production (oil prices rising), Trump wants to ramp up spending, while cutting taxes, bond yields jumping in the last month...say hello again to our little old friend inflation.
