[ExI] keynes vs hayek again, was: RE: 3d printers for sale

[BillK]

On Sun, Aug 26, 2012 at 5:05 PM, spike wrote:
<snip>
> So now they start on the next robo-olympics, as all that junk forms a very
> expensive artificial reef.  Keynes would comment: This is brilliant.  Hayek
> would comment: This is madness.
>
> As the US is facing the expiration of the Bush tax cuts on 1 Jan 2013, we
> have an across-the-board budget cut mandated to go with it.  It occurs to me
> that we have developed a system that is analogous to the robo-demolition
> derby described above: we build all this defense stuff, and eventually we
> evolved an economic dependence on it, madness or otherwise.  Now the
> political news is dominated by commentary on local economies which will
> suffer if their piece of the supply line is cut.  Our congressional budget
> office is forecasting a recession if the across-the-board cuts go forth.
> Yet neither party is making an effort to stop it, and most Americans realize
> that painful or not, the alternative is not sustainable.  We are living
> waaaay beyond our means, but if all the cuts take place along with the tax
> increases, we will be living only a few hundred billion beyond our means, a
> fraction of the previous deficit.
>
> BillK, what would you say of that?  Anders and the various monster brains
> present, what say ye?  Hardcore libertarians among us, commentary please?
>
>

I think you are talking about the Broken Window Fallacy.
<http://economics.about.com/od/warandtheeconomy/a/warsandeconomy.htm>

Yes, war production factories are busy and there is little
unemployment. But you get less spending on things like education,
health and entertainment. In general, people don't much enjoy living
and working under wartime conditions. (Understatement alert!).  :)

Predicting the effects of particular US tax increases is difficult.
With high unemployment and low-paying jobs, not many people are still
paying taxes. Same with Europe. All the frantic discussions are a bit
like rearranging the deckchairs on the Titanic.


BillK