[ExI] economic theory and experiment, was: RE: BBC on space solar
pharos at gmail.com
Thu Feb 28 11:54:09 UTC 2013
On Thu, Feb 28, 2013 at 4:11 AM, spike wrote:
> we are watching an interesting experiment playing out right now in
> the US government. We often debate Keynesian vs Hayekian economic theory,
> but coming very soon we will get to see actual experimental results, played
> out on a grand scale. The US congress couldn't agree on a spending plan, so
> it set up a deal designed to scare both sides: if no agreement could be
> reached, then there would be these huge draconian cuts, indiscriminately
> across the board. Nobody chickened out, and now these huge scary cuts are
> set to hit Friday, two days from now.
If you put these 'theoretical' budget cuts into context, they are tiny
cuts compared to the scale of the US deficit problem.
(Note: They are theoretical, because usually governments find it
impossible to make cuts in actual expenditure. Governments make
symbolic cuts in some areas and increase spending in other areas, so
that overall the deficit monster continues to grow).
The proposed cuts are only 2.4% of federal spending. So even if the
cuts actually happen, the deficit will continue to grow, and a
balanced budget is far out of reach. The illusion of US prosperity is
reliant on deficit spending and accumulating trillions in debt for
future generations to reap the consequences.
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