The Instigator
A.K
Pro (for)
Winning
2 Points
The Contender
Jevinigh
Con (against)
Losing
1 Points

Keynesian economic principles form a sound method of organizing an economy.

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Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
A.K
Voting Style: Open Point System: 7 Point
Started: 4/19/2014 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 1,051 times Debate No: 52869
Debate Rounds (3)
Comments (7)
Votes (3)

 

A.K

Pro

Keynesian economic principles form a sound method of organizing an economy.

"Keynesian economic principles" include:
Recognition that insufficient Aggregate Demand causes recessions
Government spending can stimulate Aggregate Demand
Monetary policy alone is often insufficient to stimulate an economy in a recession

Arguments:

[1]
Most economists, liberal and conservative, recognize the validity of Keynesian principles. Famous liberal proponents include Krugman, Stieglitz, and Samuelson, all Nobel laureates. Famous conservative proponents include Taylor (creator of the Taylor rule) and Benjamin Bernanke.
[2]
Many public goods necessary to the economy could or would not have been developed by the private sector: the highway system, NASA, and the internet were all products of government investments. It would not have been economically feasible for any private company to have developed these.
[3]
If government spends money on a significant project, the investment will be "multiplied" into GDP (which translates into a stronger job market). For example, if government builds a road, they inevitably hire construction companies, materials companies, transportation companies.
[3.1]
This money all goes into corporate profits. The economic accelerator effect, which occurs when businesses invest their profits, will further boost GDP.
[3.2]
Higher GDP, from these Keynesian effects means more jobs (according to Okun's law).
[4]
In a severe recession, a central bank (i.e. the Fed, ECB, Bank of Japan) can only bring interest rates down to zero, and no lower. This is often insufficient to stimulate the economy. (Liquidity trap.)
Jevinigh

Con

Simply put, the approach of Keynesian economics is Suicidal to the long term structural stability of an economy. We may be able to agree that the corner stone of society... in truth the corner stone of any issue of importance is derived from its economic implications. Keynesian model is for this reason all the more inept.


The insanity of Keynesian Economics is based in a model of Infinite growth, a model that relies on an economies ability to out grow its problems, hence the enthuses on Aggregate demand. If a fundamental problem arises from here. A perfect example is seen in the Housing market expansion and crash of the 2000's that stays with us even today. Every thing about the Collapse was Keynesian, including the massive artificial expansion of the real estate market fueled by a corrupt (at best) deritivies market. The artificial stimulus of the Housing market eventually collapsed as the "real" economics kicked in... From the down right criminal practices of making NINJA loans ENCOURAGED by the Federal government at the time, the whole thing was Keynesian to the bone.


Now as the economy tanked from the bust, resulting in Devalued capital the fed turns to Inflation and programs of low interest rates to stimulate cheap money in the finical sector. This is Keynesian economics in practice! Stimulate, stimulate,stimulate... but Corruption gets in the way and what your left with is Paper tiger... the Jobless recovery. This stems from the second fundamental flaw in Keynesian economics which can summed up with " as long as the numbers look good". And you're not off the hook yet. The deritivies market that drove the U.S. realestate market is also responsible for massive expanses in other places in the world fueled by Artificial demand. THIS results further in the massive size of the U.S. Shadow banking system which dealt primarily in the deritivies market. This is Why the U.S. Financial where " too big to fail" because the Size of the Deritives market is greater the entire &^%$ing U.S. Economy... By some accounts greater than 100-Trillion dollars.

'Everything about the way Keynesian Economics views the world is flawed including the Use of G.D.P as a primary economic indicator. But the long story short is that the Answer is "No"... No new resources to exploit is coming... no new industries are going to open up...the market system CANNOT grow its way out of the economic depression... There will be no more meaningful economic growth in the developed world outside of paper. No system that is Fundamentally AGAISNT efficiency can survive in the 21st century. In the next round in addition to rebuttals I will discuss a superior system.
Debate Round No. 1
A.K

Pro

That chain of arguments was at best incoherent and vague. At worst... a train wreck. (No offense.) I will aim to address these points as directly as possible.

"the approach of Keynesian economics is Suicidal to the long term structural stability of an economy"
Without the (keynesian :) spending from WWII, the great depression would have lasted far longer. This is a consensus among contemporary economists.

"The insanity of Keynesian Economics is based in a model of Infinite growth, a model that relies on an economies ability to out grow its problems"
Objection! Infinite growth was not one of the defined points of Keynesian economics that we agreed to.

"Every thing about the Collapse was Keynesian, including the massive artificial expansion of the real estate market fueled by a corrupt (at best) deritivies market. The artificial stimulus of the Housing market eventually collapsed as the "real" economics kicked in... From the down right criminal practices of making NINJA loans ENCOURAGED by the Federal government at the time, the whole thing was Keynesian to the bone."
Now this is both uneducated and unproven. A corrupt derivatives market, artificial housing stimulus, and "ninja loans" are not only NOT Keynesian policies (not by our definition, or any reasonable or truthful one), but also not the sole causes of the 2008 financial crisis.

"Now as the economy tanked from the bust, resulting in Devalued capital the fed turns to Inflation and programs of low interest rates to stimulate cheap money in the finical sector. This is Keynesian economics in practice! Stimulate, stimulate,stimulate... but Corruption gets in the way and what your left with is Paper tiger... the Jobless recovery"
I'm skip the grammatical mistakes (or crimes :), and point out that "inflation and programs of low interest rates" are not explicitly Keynesian. Keynesian economics, to reiterate is the government spending money, not printing money.

" the Size of the Deritives market is greater the entire &^%$ing U.S. Economy... By some accounts greater than 100-Trillion dollars. "
True, yet irrelevant. The derivatives market is not the sole cause of the crisis.

"'Everything about the way Keynesian Economics views the world is flawed including the Use of G.D.P as a primary economic indicator. But the long story short is that the Answer is "No"... No new resources to exploit is coming... no new industries are going to open up...the market system CANNOT grow its way out of the economic depression... There will be no more meaningful economic growth in the developed world outside of paper. No system that is Fundamentally AGAISNT efficiency can survive in the 21st century. In the next round in addition to rebuttals I will discuss a superior system."
Blah blah blah, grammatical crimes, Keynesian economics is unsustainable. But Keynesian economics is by definition pro-growth. The whole study of aggregate demand is supposed to encourage growth! And it does.

Use more facts.
Jevinigh

Con



I know realize the pro is making a fundamental flaw in hias argument. He is attempting to piece meal Keynisian economics and argue each mechanic seperately but Keynsian economics is a combination of economic practices. The 3,000 charcter limit does not allow me to cover all of the material that needs covered and I will Publically issue a Rematch challenge to Pro on this same topic. I look forward to debating this incredibly intelligent young man in a full debate where a argument can be liberally structured. But I will forefeit this debate. Good job Pro.
Debate Round No. 2
A.K

Pro

I win then! Thank you! By the way, I issued my own challenge to Jevinigh. I for one can't understand any of her arguments.
Debate Round No. 3
7 comments have been posted on this debate. Showing 1 through 7 records.
Posted by Chrysippus 3 years ago
Chrysippus
3k characters is very tight for a serious debate, even with all the fat trimmed out. I'd personally not want to tackle this without full 8k rounds, and at least four of them.
Posted by Jevinigh 3 years ago
Jevinigh
Don't be concerned about the out come of the debate. I will give you this debate, But Monday I will issue a challenge on the same topic. Be prepared.
Posted by A.K 3 years ago
A.K
I think that this debate has an acceptable limit. Be concise, or forfeit.
Posted by Jevinigh 3 years ago
Jevinigh
A.K. Your debate parameters have me trying to cover too much material in too tight a character constraint. I can't cram every thing in that needs cramming. I will issue you a debate challenge on Monday on the same topic with better parameters so I can structure the debate properly with out having to fit it in 3k characters.
Posted by A.K 3 years ago
A.K
@LD Thanks!

@Pfalcon1318 These are the primary principles, although I might be open to others. By organizing an economy, I mean that they should be implemented in a typical developed country.
Posted by L.D 3 years ago
L.D
As a Keynesian I have to agree with you. However, I am hoping for an interesting debate, hopefully any neoliberal/classical economists or monetarists will give new arguments against Keynesian economic principles, other than what I have heard numerous times before. Great choice of topic.
Posted by Pfalcon1318 3 years ago
Pfalcon1318
Are those the only principles? What do you mean by "organizing an economy?"
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by Jifpop09 3 years ago
Jifpop09
A.KJevinighTied
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Total points awarded:10 
Reasons for voting decision: FF
Vote Placed by Wycek 3 years ago
Wycek
A.KJevinighTied
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Reasons for voting decision: This should be a tie. I want to see the rematch.
Vote Placed by Ameliamk1 3 years ago
Ameliamk1
A.KJevinighTied
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Total points awarded:01 
Reasons for voting decision: Con forfeits. I look forward to their rematch.