From: GERALD LEVY (gerald_a_levy@msn.com)
Date: Thu Apr 24 2008 - 12:45:22 EDT
> I don't really understand what Hillel Ticktin is talking about, because I do not know what exactly he means by "Keynesianism". Hi Jurriaan: It's not really that hard to understand. Keynesian policy in a 'recessionary' period emphasizes fiscal policy - in the form of increased government spending and/or decreased taxation - as a way of stimulating the growth of consumption, spending, employment, and aggregate demand. The Bush administration's "tax rebate" could be seen as a tax cut consistent with Keynesian principles - it's certainly different from the 'supply-side tax cuts' (of the capital gains tax, corporate taxes, and the tax rate of the highest income earners in the federal income tax) that we have seen since the early 1980's (the Reagan administration and after). Under the circumstances (which include worsening expectations on the part of both consumers and investors), I anticipate that the effect of these rebates on real GDP - even after the 'multiplier' is taken into consideration - will be negligible. While I don't think that there will be something that resembles the "New Deal" (whoever is elected President), an increase in government spending is quite likely, imo. Most likely it will take the form of increased military spending and that will most likely mean further increases in the budget deficit. Rather than the "New Deal" being the "model", I suspect that increased government spending in the 1930's in Germany is more likely a model that will be emulated in the US. This dynamic suggests that - ultimately - the US capitalist class will attempt to wage another war as a way of stimulating the economy. But, of course, there are other possibilities. Frankly, I'm not sure that there is any segment of the capitalist class in the US which has a well-developed and thought-out perspective on how to overcome the crisis. In some ways, I think the current crisis has caught them by surprise. Maybe they were victims of their own ideology and believed that the economy would continue to be "Bullish". Perhaps, for this very reason, a lot of them seem to be wringing their hands in despair and anticipating the worst. In solidarity, Jerry _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/ope
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