/sci/ - Science & Math

>>3548606
Exactly. They both occured and the monetary policy caused the misallocations, with the fiscal policy helping it along/propping it up.

>>3548219
>I agree, but the problem wasnt caused by misallocation of resources. It was caused by an inappropriately large increase in the money supply, which manifested itself in the housing bubble.
And the housing bubble was a misallocation of resources.

>>3548141
The economic problem is one of supply. The first thing anyone who takes an economics course will learn is that the economic problem is how to satisfy our unlimited wants (or demand) with limited resources (supply).

The current problem is that you have a heap of resources that are either unemployed or employed in places they shouldn't be, propped up by government attempts at "stimulus". How do you fix this by pumping even more money into efforts to stop the economy from readjusting?

And when you have massively inflationary monetary policy and fiscal policy pointed directly at assisting the growth of the bubble and postponing its bursting, you are going to cause a bubble. There is no "smart" way to go about this other than by changing the method and not doing it, in much the same way that there is no "smart" way to go about shooting yourself in the face short of not doing so.

>>3548086
>If we cut those things thats 1 trillion approximately. That means it would take 14 years to pay it off.
With a $1 trillion + deficit a cut of that size would be necessary simply to get rid of the deficit, let alone pay down debt.

>china actually employed it as of last year, and it worked! they are officially no longer in a recession.
Indeed, they're instead in the process of continuing to blow up an economic bubble that makes the housing bubble in the USA look like nothing.

The answer from keynesians when their policies just make things worse is always the totally unfalsifiable "but it wasn't big enough".

>>3494973
>The majority of the people don't chose to be unemployed.
Indeed. Most are priced out of the labour market by excessive government regulation.

>>3494908
>What do you think was the point of Medicare, Medicaid and Social Security?
>He thinks that governments only increase their control over industries if it's in the interests of society!
>laughingeconomists.jpg

This is why people don't respect economics ;_;

>>3459013
>What I do know is that if the debt ceiling is not raised relatively soon, it will cause a collapse of 40% of federal spending, amounting to 10% of USA's GDP. That means the economy will contract by 10%.
It doesn't work that way. The government doesn't produce wealth, it consumes it and redistributes it. Less government spending just means more resources will be available for the private sector.

Really this whole default issue is nonsense. There isn't going to be a default. If the ceiling isn't raised, the government will be forced to live within its means and in the long run the USA will be better off.

Or the ceiling can be raised further and the politicians can just avoid the elephant in the room until the debt is so large that it can't be paid off by a reprioritisation of revenue and there will be a default.

>>3459048
>Russia
>economic power

>>3419205
>Civil war breaks out
>Forest of supertrees gets burned to the ground
>All the carbon is released back into the atmosphere
Such is life in Africa.

>>3399692
>Define most efficient. The ones that make the most money
In a competitive market, this means the one that created the most value, so yes.

>
A "startup" is a business when it actually does something. They weren't a business before they were doing anything. Large companies, with hundreds of times the investment capital, never came near the same productiveness. Your argument that companies with more money will inherently be more productive and should be taxed less to promote this is invalid.
I'm not saying big businesses should be subsidised relative to small.

>Patents are an outgrowth of the free market.
Patents are a government-granted monopoly on a non-rivalrous good.

>>3399675
>I'm saying that investing federal dollars into vague 'research' blocks, in an attempt to create jobs, is inefficient, since most businesses are not out to invent new stuff.
But I'm not saying the government should subsidise private investments?

>>3399656
>because you can profit more than taxes.
What the fuck does this even mean?

>>3399623
>Then small business get taxes and research brakes.
How about we just treat businesses equally and those that are most efficient at making good investments will succeed, as opposed to those that some random dude on the internet assumes will be more efficient at making good investments succeeding?

>Except this company DID NOT EXIST before the Tesla Roadster. IT IS THE SOUL PURPOSE OF IT'S EXISTENCE.
So startups are just defined out of the business world in your little model?
>huurr duurr without it's products a business wouldn't exist so it's not really a business

>Haha, Tesla is actually one of the best examples of anti-corporate behavior. Edison tried to fuck him over on patents
Not all advocates of free markets believe in patents, so I don't see your point here either.

>>3399608
This might sound revolutionary because most people talk of "profit" in a vague sense where it means little more than "oh some evil shit that rich people get", but high probability of profit merely means that there is a high probability that the investment will create more value than it takes. This isn't a bad constraint.

>>3399595
>If we left it up to companies, we would have never developed computers, cellphones or even the fucking car.
[Citation needed]

>Companies can do NOTHING but improve on that which makes them money.
They make money by producing things of value. The fact that government investment doesn't have this constraint isn't a good thing.

>Only the most dedicated and the richest have any reason to invest in untested research, such as Tesla or Bill Gates.
Who apparently are defined out of the private sector in your model.
>YEAH ALL THESE PEOPLE MADE INVESTMENTS BUT WHAT ABOUT THE REST WHY DONT FREE MARKETS HAVE EVERYONE MAKING REVOLUTIONARY INVESTMENTS

>>3399576
>That wasn't a large business.
So? Maybe small businesses are better at revolutionary research. If so this isn't a bad thing.

>It really even wasn't a BUSINESS until they had the opportunity to sell a car.
PROTIP: Businesses generally make investments before they sell products. Trying to define the period prior to selling products as "not a business" is pants-on-head retarded.

>>3399577
>No, it means only 1 out of every 1 million companies will try. Because they're run by a bottom-line, and not by people that will have money regardless, aka the government.
>It's easier to dedicate billions of dollars to something when that money will continue to come regardless where it's spent.
So your argument against corporate investment is that they won't do it unless there is a payoff at the end? This isn't a bad thing.

>>3399562
>When a privately owned company develops a brand new technology that has 0% knowable probability of being profitable
The private sector won't invest in projects that have no potential of being worth more than what they cost (how a profit is made). This isn't a bad thing and this is an incredibly retarded criteria to apply.

>>3399565
>Government never said they would bail them out in advance.
The fact that bailouts have occured regularly in recent history, combined with the direct intervention of government in affected markets like housing, made this an incredibly strong implication.

>>3399552
They did suffer. They went broke. Thankfully the few productive resources they did have were allowed to be bought out by other companies, largely because the government no longer stopped them from doing so.

>>3399550
Wait, so your example of the fact that business won't create revolutionary products is an example of a business creating a revolutionary product?

>>3399524
"For one"? You mean "the only one I could find on google/wikipedia as I rushed to find justification for the deregulation line I've been parroting"?

So how did that cause the crisis? Note that in the wake of the crisis, several takeovers of financial institutions which would otherwise have collapsed occured only because Glass-Steagal was no longer preventing them.

>>3399517
There is no solid foundation for the idea that business won't invest in anything but the most incremental, basic research possible. Tell me of an example and I will believe you.

>>3399503
>Like a truly communist country, there isn't one.
Unless you want to take into consideration black markets, there have indeed been nations that have essentially banned all private economic activity.

>It's simply impossible to be purely a free market
[Citation needed]

>The real questions are where along the giant spectrum of mixed markets do you sit, where do you want to be, and where is the best place to be.
And not only theoretically, but empirically speaking, the further towards the free market idea the better.

>>3399490
This is just becoming pointless unless you're willing to cite exactly what regulations were removed and how this caused the crisis. I've already requested this of you several times. Screaming DEREGULATION in all caps on the internet doesn't mean that it happened.