Keynes Vs. Hayek: To Tax And Spend Or Not

PhilinBSAS

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In a hole and want to get out? Or keep digging?

Simple question - so what is the simple answer.

For all those who consider there isnt enough informed opinion on here about these two great economists of the 20th C and fancy they may enjoy half an hour of contrasting and illuminating debate which doesnt get too technical.

www.bbc.co.uk/programmes/b012wxyg

Debate last July at the London School of Economics and Political Science including two heavyweights as proponants - Skidelsky, Keynes' biographer and George Selgin of the Modern Free Banking School

I did a search and hasnt previously been mentioned on this site :)
 
Unfortunately, no matter how nicely I ask, nobody ever pays me taxes.
I am, on the other hand, free to spend as much as I want.

so for me, anyway, its kind of a moot question.
 
tax and invest in infrastructure for the future of the country appears to be the way to make it work.

Austerity just drives down consumption and eventually results in less jobs.
 
Excellent thanks for the Posting. Yo Hayek..!!

I'm a follower of von Hayek and the Austrian School of Economics, The founders Manger and Misses and others left the continent or were victims of Nazi period.
 
tax and invest in infrastructure for the future of the country appears to be the way to make it work.

Austerity just drives down consumption and eventually results in less jobs.

This approach did not seem to have worked very well for Japan. Or for the old USSR, for that matter.
 
Great new music album for this Christmas.



Great! but wait one moment this is just some tired old Classics rebranded as New Economics - Demand is stimulated by supply indeed this is just Santa's tired old Fairy Stories brought out of storage with the plastic Christmas tree and twinkly lights.

As revealed in the Chancellor's Autumn Statement the UK economy running an austerity model has been trying for 2 and a half years to pay back debt instead of stimulating the economy as a result is now in prolonged stagnation unlike other northern EU economies and USA - and the UK will end up taking longer to pay back even more accumulated debt. That sounds like a Keynesian solution is needed instead of sticking with Hayek.
 
As revealed in the Chancellor's Autumn Statement the UK economy running an austerity model has been trying for 2 and a half years to pay back debt instead of stimulating the economy as a result is now in prolonged stagnation unlike other northern EU economies and USA - and the UK will end up taking longer to pay back even more accumulated debt. That sounds like a Keynesian solution is needed instead of sticking with Hayek.

I don't recall Hayek ever proposing austerity to bail out European banks.....Actually, I don't recall Hayek ever proposing governments borrowing large amounts of money either.
 
The austerity in the EU is to "bail out" economies struggling from toxic debt infected banks run by criminally reckless banking management and inadequate regulation and supervision by politically compromised Governments on both sides of the Atlantic.- These are structural economic adjustments that arnt happening.

Hayek lived a lot longer than Keynes and had time to refine and even redirect his theories however even he was not around by 2008 to comment on what was arguably caused in part at least by Hayekian belief in "light touch" regulation and the "night watchman" role of Government and it is a fair assumption that he would have then even though a consequence of such minimalist government been in favour of both imposed austerity and the catastrophic collapse of "bad banks". After all he never accepted that the economic collapse of the Wiemar Republic had anything to do with the political consequences that followed. Keynes who died decades before (shortly after the Bretton Woods negotiations) would also have sought to urgently purge bad banks but most unlikely he would have sacrificed maintaining aggregate demand in preference to austerity.

All assumptions of course but see reference to "Hayekian wave of buyers’ remorse that deemed that the swift reduction of the national debt was more important than giving jobs to the unemployed" in:

The Great Debate - The Keynes Hayek Showdown in http://blogs.reuters.com/great-debate/2011/11/07/the-keynes-hayek-showdown/
 
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