Read the article and decide which famous Economist you most identify with. Then watch the two youtube videos at:
Fear the Boom and Bust:http://www.youtube.com/watch?v=d0nERTFo-Sk
and Part II of the Epic Battle at:
Fight of the Century: http://www.youtube.com/watch?v=GTQnarzmTOc
Identify at least 3 points from either Economist that you agree with. List the point and the video that it came from. Don't copy your classmates responses.
60 comments:
Between these two economists, I mostly agree with Keynes. Although Hayek's idea of minimal government is ideal, laissez-faire economics is what plunged the nation into the Great Depression. In the first video, Keynes emphasizes that people can't "wait for a recovery." If everyone stays on the sidelines,no progress would be made.Therefore, the government has to step in and take the lead,as mentioned in the second video. In the second video, Keynes' point is illustrated through WWII which effectively ended the Great Depression due to consistent government spending.
Jennifer Shen- 1st period
I agree with Keynes more.
1)In the first video, it says "Savings is destruction" To recover from depression, boosting aggregate demand is essential. Savings lower the aggregate demand which causing the recession.
2)In the first video, it says "The multiplier drives higher the economy's health."
3)In the second video, it says unemployment is a problem that we cannot solve it by waiting until the economy breaks.
I agree with Keynes more for a variety of reasons.
1)In the first video, Keynes praises monetary and fiscal policy. He states how public works, war, and digging ditches has the same effect.
2) In the first video, Keynes says deficits are a cure to when bank policy tanks.
3)In the second video Keynes emphasizes largely on how spending is crucial. Using the example from how spending revives the economy in all possible situations.
Both economists have great theories on macroeconomics, but I'd have to identify more closely to Keynes.
• "Fear the Boom and Bust": Government stimulus when in a recession injects money into the circular flow as not enough money is in the economy. With less consumers purchasing products, demand falls, wages drop, and the economy suffers. But with the government pushing more money into circulation, more people will start to purchase goods as the economy regrows.
• "Fight of the Century": Saving is not the answer to recession. Keynes emphasizes that continuing to spend money while in a depression is the answer for economic growth. Similar to my first point, money, and the spending of it, drives the economy to continue flowing. Continuous circulation through wages, consumer expenditures, etc, allows the nation to thrive.
• "Fight of the Century": Despite siding with Keynes, Hayek's point concerning government intervention as "bailing out the losers" stresses a great point. Those that make poor economic decisions, such as bad investments or poor choice in products, are put there by the 'invisible hand'. Providing them more money to squander just pushes more resources into the wrong hands.
Tyler Morris
1st period
I would have to say that I actually agree with Hayek more.
1.) He countered Keynes point of wars pulling us out, with the fact that they hurt us. They may have us spending more, but they cut the productivity of most other business sectors.
2.) Also he states that free markets will sort themselves out, why would we voluntarily help out a failing bank? Most of them still do not follow the rules set out, and are failing again.
3.) There is even a point where he says we could have full employment, and nothing to eat. There has to be some sort of selection. If everyone was employed, wages would go down, and so would productivity. We would quite literally starve ourselves.
Nicolas Alba
Period 3
I agree with Keynes' point of view.
1) I agree that spending circulates the economy. Saving money does not do anything positive for the economy. Maybe for the an individual, but not for the economy s a whole. (1st video)
2)Hayek says that "the economy is us. The economy is organic" (2nd video). Which would go against Hayek and for Keynes. Because we are the economy, the economy will follow how we feel/act. If we are scared, we won't spend. If we don't spend, the economy does not get better. If the government sparks the economy, people will see that it is improving, grow less fearful, and spend.
3) The third point is how we only spend in war (2nd video). When we did spend, we were booming. Tyler argues that the economy got hurt when we pulled out, which is very true. But if we spent like we were in a war (or at least half as much) then we would still improve. But because there is no actual war, there is nothing to pull out from.
Period 4
Although both sides made great arguments, I mostly agree with Keynes. In order to keep the economy flowing, we need to spend more money, and so what Keynes supports makes perfect sense (Video 1). In “Fight of the Century", Keynes explains that government spending is what boosted the economy and got it out of the Great Depression through spending during World War II (Video 2). Secondly, pumping money into the economy by government spending will only create artificial bubbles that will eventually burst, resulting in a continuous cycle of recession and instability (Video 2).
I identify mostly with Keynes. This is because I agree with his point from the first video that the government needs to spend money in order to stimulate the economy when in a depression. In the second video, Hayek says the economy is organic. I think that this is true because we choose when to buy and save, therefore, the economy is organic, or living. Lastly, the the first video, Keynes says that deficit is a good way to get the economy out of a depression. I support this thought
I identify with Keynes more,
1) In the firs video, there is a strong emphasis on how an increase in the aggregate demand will allow the economy to recover out of the depression.
2)The more consumer goods are being consumed, the less savings that occur. As a result, the economy is not hurt by excessive saving and can continue to grow.
3) In the second video, Spending is once again emphasized to show that economies can only grow when circulation of money is present, not when all the money is simply stored and not used.
Although Hayek's idea of "setting the market free" is attractive, Keynes' theory is most sensible and has actually overcome problems that Hayek's couldn't. In the second video, Keynes described the government like a mechanic, starting the spark to get the car running. When there isn't enough money for the economy to function, all the government has to do is give some money and set it going again. In the first video, Keynes says one of the factors of the Great Depression was "sticky wages", where people did not want to lower their wages, thus prices could not decrease either. People could not afford to live, so they continued saving which just added fuel to the fire. Also in the first video Keynes says that the economy is all about the "circular flow" of dough. Which makes sense, because an economy cant run if it's "gas" has stopped.
Kristal Pinto
Period 4
I agree with Keynes' ideology more.
1) In the first video Keynes states "I want to steer markets" I believe that ideology is right because without someone overlooking it and steering it, there is no saying what could happen.
2) In the second video Keynes says "We could have been better if we only spent more, too bad that happens when there is a world war" this is good for a short time period. It is a basic cycle because the government spends and puts money into the consumers pockets, which eventually the consumers spend the same money.
3)In the second video,"that's why free markets are so prone to fail"
It goes back to the same idea of having no one to push it in the right direct or to pick it up when it crashes.
Period 4
I agree with Hayek more.
1) Within the first video. The government should be lead away from the market because with it trying to "help" the economy grow it is actually damaging itself and its people with the outcomes of its ideal ways to flourish the economy.
2)With Hayek's statement in the second video, "Saving is the key to success" shows that with the revenue saved up by the people they can invest in more while companies give back products or services. With this, it can be more simple to continuously do this task than go to war and have to ration everything for the citizens of a country.
3)In contrast to Keynes' claim, Hayek's idea tells that with the people whom lose everything due to poor decisions in business stocks will need to be revived and put back into the work force in order to "get the flow going."
Keynes:
1.) Savings is destruction if the economy
2.) He said that the government has to step in, and Lizeefar wrong
3.) He also says spending is the only way out of reccession
Seth Jokinen
4th period
When considering the both viewpoints, I would have to say Keynes wins out on this one. 1.) As the article has stated, most economists have now viewed keynes as the superior model through time. 2.) The recently passed depression, as is stated in the article is speculated to be started from a lower than normal aggregate demand. 3.) Unlike the Hayek's ideal of cutting cutting and cutting as stated in the article, this won't end well especially if we look at our own Great Depression
Hayek for the win!
1) Printing money leads to a devauluing of the American currency and a recession or depression.
2) Saving money lowers interest rates over time. Businesses borrow less but consumers spend more due to more available funds and the low returns on savings.
3) When interest rates increase, businesses borrow more and consumers start to save more. The money that is saved is recirculated into the economy by businesses.
I tend to agree with Hayek.
1) In the first rap battle, he mentions that expansionary fiscal policy leaves the government in debt.
2) Also in the first video, Hayek explains that, when the government prints more money, people confuse it with loanable funds, so rapid investment soon turns to devaluation of capital.
3) In the second video, Hayek suggests that, although increased government spending during WW2 increased GDP, consumption shrank because scarce resources were used up building war supplies.
Matthew Francis
Period 3
I mostly agree with Keynes though a slight part agrees together with Hayek. Keynes is correct about the multiplier creating a healthy infrastructure for the economy, and his theories did help immediately recover the economy from the Great Depression. However, I believe that laissez-faire policies help in many of the ways Hayek described. Such as the building of new war machine. Once there is no need to build more, the invisible hand will slap the person making them on the wrist
Period 4
Although I agree and disagree with various views of both economists, I think I closer agree with Hayek.
In the first video, Hayek says real savings come first in investment because the market coordinates time with interest. In my opinion, this is a valid argument because investment really does rely on savings, since consumer income and savings affect the likelihood to invest.
In the first video, Hayek also explains how government induced "booms" of the economy turn into busts, because saving is a better way to better the economy, rather than printing new money.
In the second video, Hayek explains how jobs are a means instead of an end, and how they are used to better people's lives and how real growth stems from production of what people demand.
1)I enjoy the fact that Hayek advocated for the limited intervention by the government because i like the notion that the economy is self sufficient in its undertaking. Evan though the idea is not feasible, it still is a very cute thought. "Fear the Boom and Bust"
2)Demand-management provided by Keynes is another key idea that is more in tuned with reality that Hayek's because it was a combatant to all that Hayek believed. And it gave the government a way to help stabilize the economy. "Fear the Boom and Bust"
3)In the end, Keynes come on top because his is the most capable in fixing a broken economy, where Hayak does not have a contingency plan for when we hit another depression. "Fight of the Century"
Tori Daniels
3rd period
Of the two, I tend to agree more with Keynes.
"Fear the Boom": I feel that Keynes idea seemed more realistic. We need more government regulation and spending in order to push the economy back towards positive times. People of the Great Depression feared spending their money, which ultimately cause the economy to crash. While people believe that the market should be hands-off, when the people aren't spending the only way that the market can continue to flow is if the government pushes positive reinforcement out by showing the people that spending is okay.
"Fear the Boom": Keynes claims that saving is the most destructive thing to the economy. While saving may seem good for the average household, it is not good for the economy altogether. Money flows from person to business, which helps run the business and provide income for the business owner. Without the person spending, the business would fall and the business owner would be out of income.
"Fight of the Century": Keynes says that the economy is booming during wartime because of all of the spending going on. If we are spending money, then the economy can run efficiently. With all of the spending going on, the economy did run smoothly.
Cortney Corley
Period 4
In the “fear the boom and bust” video, I agree with Keynes when he states that in the long run we are all dead. I think that we need to face the problems directly in front of us and not assume things will work themselves out. We also need to be able to help future generations, not create more of a problem by stalling. I also agree with the fact that Keynes says that spending, not saving, actually helps the economy because it allows money to cycle through. Saving money puts it away, and creates a lack of money in circuit. In “fight of the century” I agree with the statement that wars can actually help the economy because they increase spending. Keynes says that excess spending after the war got the US out of a recession, so his idea of large government spending works.
I strongly agree with Keynes. Firstly, I appreciate his idea that a government shouldn't have a balanced budget if there is a recession. It doesn't make sense the have a balanced budget if tax money coming in will only get lower. Secondly, while lowering taxes is the better option to pull out of recession, government spending needs to match the needs. Even president Hoover recognized the need for government spending in depressions and authorized the Hoover Dam. Thirdly, i like his comment that the economy's problems won't be solved by waiting. Too often do we save while assuming that the government and others will spend. EVERYONE needs to spend, and savings are the reason why the economy doesn't work itself out.
From the view of the economy by the two economists, I would agree more with Keynes.
1)In the first video, Keynes mentions the idea of sticky wages and unemployment. Business weren't able to pay workers consistent wages had to layoff/fire many laborers.
2)In the first video, Keynes mentions not keep money in your pocket. If everyone in the country is saving money, there is no investment and spending and it would soon crash the economy.
3)In the second video, Keynes mentions that you can only spend more during a war. it was because of WWII which brought the United States out of the depression. It was necessary for the govt to increase spending and create programs to prime the pump of the economy.
Akshay Thakor 4th
I personally agree with Keynes more.
1) I agree in the idea that consumers shouldnt save alot. saving doesnt stimulate anything and keeps everything in like a halt/ stand still situation, that will also cause a halt in the economy. saving is bad.
2) i also agree further more on the government spending money. i agree because if the gov. can spend money, people will learn how to also spend money, this in turn will help everyone spend money and help stimulate the economy. yes, it is hard for the gov to do. but if they can, itll be a cycle of spending money. like the consumers will spend more money, that will increase tax revenue, that will give money to gov. which gives back to people, which people give back again, win win situation.
3)the civilians need to spend money. they should spend the money in the economy. that way, we can help the nation as a whole. if consumers dont, and the economy falls into recession, well the consumers are gonna blame the gov and economy. the consumers need to be educated.
I would most identify with Hayek, and disagree with Keynes completely.
1. The first video brought out the main point that it was human investment that decided the economy not the government. If you drive the economy further in by having the government spend it will tax more later, and that is why you motivate others to spend and not have the government spend.
2. The second part of Hayek's thoughts that I agreed with in the first video was the destruction of those various tariffs that prevented trade. The government was literally barring people from investing, buying, or any other attempt to stimulate the economy. As long as the various tariffs were there people were not motivated to spend anything period.
3. The nail in the coffin came with the second video and the proof was that the long run happened after the recession, and the economy is now especially suffering. Keynes argues they are out, but Hayek is the correct one as the government is in immense debt(the largest in human history) and people are all in jobs yet they all lack wealth. Note the massive cost of college as well as many other goods today that no one seems to be able to afford even though people are spending tons on their latest goods that they also cannot really afford(like that brand new I-Phone that just came out).
I agree with Keynes more.
1) As you see in the first video it shows that government would need to step in and boost aggregate demand.
2) Also in the same video it shows that saving the money does not put your money to work for you. You have to spend and stimulate the economy.
3) The second video also stated a good point where spending revives the economy and we should not wait for the economy to fix itself.
I align myself more with Hayek:
1)The Keynesian theory does not adjust for the "human change" as stated by Hayek in video one.
2)With Hayek stating how the booms are more important then the busts; yes, one may fall, but the recovery and adaptation to that flaw is far more important then the fall taken. In essence if the government keeps on fixing the mistakes of the market the market cannot fix its own mistakes.
3)Looking at video two Hayek states that even though the removal of the economic problems in the economy, the government is now indebted, and with the government taking the hit, the economy can only get worse living off of false hope, leading to a more drastic downfall.
Prerna Kamnani
Period 1
Personally, I agree with Keynes.
1.I believe that through the use of monetary and fiscal policies the government will have the ability to assist the economy and provide stimulus to a depressed economy by creating a demand. With the government’s assistance, the economy would able to make an attempt to return to full employment. In the video “Fear the Boom and Bust,” they say “the monetary and the fiscal, they’re equally correct Public works, digging ditches, war has the same effect.”
2.Additionally, I believe that demand is the most important measure to economic activity. Without demand, the economy will be unsuccessful. Therefore, like Keynes believes, aggregate demand is the life source of the economy and keeps it working. In the video “Fear the Boom and Bust,” they say “I had a real plan any fool can understand, the advice, real simple—boost aggregate demand! C, I, G, all together gets to Y Make sure the total’s growing, watch the economy fly”
3.Another point where I agree with Keynes is that he promotes spending at all times. He believes that to keep the economy or to get it out of a depression, it is important to keep spending and promote spending. In “Fight of the Century,” My solution is simple and easy to handle its spending that matters, why’s that such a scandal? The money sloshes through the pipes and the sluices revitalizing the economy’s juices it’s just like an engine that’s stalled and gone dark To bring it to life, we need a quick spark Spending’s the life blood that gets the flow going Where it goes doesn’t matter, just get spending flowing”
I agree with Keynes more, although both economists made some convincing, logical arguments. However, I agree with Keynes' points more. In video 1 he points out that if we keep saving, then there would not be money to circulate through our economy. Our economy would then be more stagnant and sink deeper into depression. In video 2 Keynes also argues that government spending will help the economy because the money will start to move within our economy, and once trades starts to gain momentum, the economy will slowly recover. Keynes also argues in video 2 that at least government spending is an initiation to solve the problem, rather than waiting around for the problem to solve itself. In short term, government spending will provide relief, and this will at least cause more positive effects than to do nothing.
Per.1
Between the two economists, I have a very hard time picking which one I agree with more. I believe that we must combine both of these ideas and meet in the middle for Economists. While minimal government has it's benefits, there is no doubt that in time we must have the government step in to help along the economy. However, the point that wars actually hurt us more than help us I can agree with. While government spends more, I would definitely agree that it majorly sets back other businesses. While the reprinting of money may lead to a depreciation in value, I believe that it could be put to some use. Finally,I believe the multiplier theory is a great reflection on the economy. It is clear how $1,000 can be worth more than it's monetary value when it is spread throughout the economy.
Gabriel Camera
4th period
I personally like keynes way of thinking more than hayek.
"saving is a destruction" from the first video. When people save, other people lose jobs. when people spend, other people work.
Unemployment is a problem that can't be fixed by waiting for a miracle. - from the second video.
In the second video is also said that you need money flowing in the market to have a successful economy.
Brookley Torres
4th
I agree with Hayek more. I think that many times the government oversteps its boundaries and uses the economic decisions to give them more power rather than actually helping which was stated in the second video. I think the second video also makes a good point when saying that though full employment is ideal in the case of war we would be out of food and other things. Lastly, I like the point that Hayek had in the second view when saying that spending can be the enemy because there is such a thing as too much spending including government spending which can be shown in our national debt currently.
I feel like both of these economist ignore two key principles:
1) wealth is the product of labor, without someone doing work value will not exist.
2) value is just the modern way of calculating material wealth, based on how much profit it brings.
Either way, I do believe Keynes is more right. Spending should be a big part of our plan to repair the economy, however, I do not believe that saving is a "distruction" to our economy. I believe "distruction" is a strong word. I believe saving is a road block to quick recovery only becuase savings will eventually get spent.
1st
I agree with Keynes personally
1.) I agree that in order for it to be stable in the economy there must first be a flow in the market in which consumers must spend at all times.
2.) I disagree with Hayek in which Keynes ignores the human action and motivation, Keynes in my opinion bases his thoughts and ideas off of the actions of humans.
3.) Also as stated in one of the videos from Hayek, he believes that capital structure is key and mail investments wreck the economy. Physical entities are important to have regulating in the business world, therefore I completely disagree with his statement on the investments. Yes it is important as well for there to be capital structure but there are so much more important things that matter, so not just that would be key.
I feel like both of these economist ignore two key principles:
1) wealth is the product of labor, without someone doing work value will not exist.
2) value is just the modern way of calculating material wealth, based on how much profit it brings.
Either way, I do believe Keynes is more right. (1)Spending should be a big part of our plan to repair the economy, however, I do not believe that saving is a "distruction" to our economy. I believe "distruction" is a strong word. I believe saving is a road block to quick recovery only becuase savings will eventually get spent. (From the first video).
(2) one thing I do agree with Keynes in the first video is the invisable hand. I believe people should make there decision and improve on it based on failure.
(3) Also in the first video I believe Hayek is right when he said saving can help the economy. Like I said earlier, which proved his point, saving will help in the long run.
Although Hayek's ideals on a minimal government involvement within the economy can be rather sound, it was essentially those beliefs that plunged America into turmoil (i. e. The Great Depression).
1. Keynes was also correct in stating that savings is a poison to the economy as it prevents money from circulating the nation like blood. Sure it is a positive for the individual, but on a macroeconomic scale, it is a dangerous maneuver for everyone to save.
2. Nothing could have been closer to the truth when stating that we spend much more during wartime.
3. Not to mention Keynes claim on spending to be the only real cure out of a recession.
Aman Gupte
Period 1
I mostly identify with Keynes.
The idea of saving money is great in theory for the individual but when you assess its effect the way Keynes did, you understand that "savings is destruction". What really convinced me was the example of wartime economical boom that we experienced.
I agree more with Keynes:
1. In the second video Keynes says " we could have done better had we only spent more". I believe government spending boosts the economy
2. In the second video he says "get spending going" I agree that spending also boosts the economy.
3.In the first video, it says "The multiplier drives higher the economy's health."
3)In the second video, it says unemployment is a problem that we cannot solve it by waiting until the economy breaks. This issue must be solved early.
I personally believe Hayek is better.
1) Hayek makes the point that if we keep throwing money at businesses, they will never fail and will get used to getting free money and will continue to make the same mistakes because they know there will be now punishment.
2)Hayek was correct in saying that we spend the most during war time
3)Hayek makes the point that by spending so much money, we inflate our dollar, causing it to depreciate. the more money we loan, the weaker our dollar becomes.
Saimol Edaparampil
4th Period
Out of both Keynes and Hayek, I agree with Keynes more. First of all, Keynes' point that we should be spending to make the economy better is very logical. If we do not spend, the money would not be moving the way it should be and that would slow down a lot in the economy, which is definitely bad. A point made by Hayek, that is reasonable, is that he says that the people have control of how the economy is doing because we "are" the economy. Therefore,that relates to how spending is good for the economy. Lastly, Keynes says that the solution to get out of a recession would be to spend more money, which would sense in addition with graphs to support it.
Between Keynes and Hayek, I tend to lean towards Keynesian principles. The most significant reason is that he advocates spending in times of recession. Indeed, it theoretically seems as though spending is the key to a booming economy. In fact, it is those times that we don't spend that tend to be the most drastic and times of turmoil. The Great Depression is a prime example of this. Because everyone started saving, the economy became worse by the day. Therefore, I feel that Keynes makes a stronger argument, which may be a possible reason why his economic ideas are more renowned than those of Hayek.
John Moore
3rd Period
I agree with Keynes most. Although minimal government is best, the government must intervene at times of economic crises. The best example of this is the Great Depression in the '20s-'30s. Keynes points were proven in both videos while Hayek's were more just theory it seemed.
I identify with both Hayek and Keynes.
From Keynes I agree with the idea of stimulus packages and bailouts mentioned in the first video.
From Hayek I agree with the idea of not engaging in high consumption in the midst of an economic downturn as mentioned in the first video. Although I agree with some government spending I do not believe that spending will get us out of debt.I also agree with Hayek in the second video in saying that the only reason more spending boosted the economy was because of the war and without it there would probably be high unemployment.
I agree with the Keyenesian principle of government spending to stimulate an economy. If things were done the supply sider way I would highly doubt that most of that money gets pumped back into the economy, because of greed. During a recession people are more likely to save, and during a recession this idea seems like, to me, that you just give a bunch of paranoid people the last chance at saving the economy, but no one would do anything because they're too scared of being the one to lose everything.With government spending, one can at least reasonably assume most of the money is going where it needs to go. Common sense follows Keynes' model. To be totally honest neither system works though.
I like Keynes more due to the action he champions. Leaving a mess to itself is folly and requires the government to dab its hand into the process. Keynes point is further exemplified by the great depression. The involvement of the government in world war 2 put an end to the economic problems the US faced.
Harrison You
4th period
Examining both economist's opinions, I can mostly agree with Keynes' argument. Even though Hayek's belief that minimal government is the way to go, laissez-faire economics is the what caused America to enter into the Depression. In the first video, Keynes pounds on the notion that the people cannot wait for a recovery. However, if everyone does nothing, then no progress can be made. Thus, the government must take action in order to affect change. In the second video, Keynes' point is illuminated through WWII, which helped close the Great Depression due to the massive government spending.
Alexander Pappan
4th Period
I think I agree with Keyne's ideas more. Keynes states that deficits what can fix banks when they begin to tank, he also says that spending stimulates the economy, and finally Keynes also states that free markets fail due to no stimulation when the begin to drop
Alvin Mei
4th Period
I agree with Keynes for these three reasons
1. In the second video, unemployment cannot be solved by just waiting for the economy to fall apart.
2. In the first video, I agree that spending is for the better of the economy. Nothing is going to be achieved if money is not moving in all directions.
3. I also agree that with a strong increase in AD, it has the power of bringing an economy out of recession. To increase AD there needs to be an increase in government spending.
I agree with Keynes view because in the short run it is most beneficial when the economy is in recession (or inflation).
1.) In the second video, Keynes said "we could have done better had we spent more..." this relates to the Keynes view of consumption either through Consumer expenditures, Investment expenditures, or government purchases, aggregate demand is bound to shift right thus increasing GDP and decreasing unemployment.
2.) Again in the second video, Keynes explained that during WWII, the depression was cut short through the employment of goods caused by the increase in consumption and spending. Again, GDP or real output was boosted, unemployment decreased as the aggregate demand curve shifted to the right.
3.) Lastly, Keynes said in the second video that sparking the engine of the economy is the way to avoid recession. This sparks involves government spending and thus is necessary only during times of recession (or inflation).
saira sultan pd. 3
i tend to agree with Keynes more than Hayek. in the first video
keynes discussed monetary policy with a strong belief in its success. in the first video Keynes also believes a deficit is an efficient way to get out of a depression. lastly, in the first video with Keynes belief in the invisible hand.
I would agree and support Keynes out of the two because:
1) By cutting savings we will increase consumer spending. Video 1
2) In order to maintain stable and thrive governments need to be in charge of the economy and intervene whenever necessary. Video 2
3) Keynes discusses the circular flow model and i agree with what it represents and how it works within a government system. Video 1
1) From the Fear the Boom and Bust video, I agree with Keyne’s suggestion that, to recover and economy from recession, the aggregate demand must be increased. The economy is run by the flow of money so if savings increase and the government does not stimulate the flow of money, the nation will go deeper into recession. It’s “all about spending” and “circular flow.”
2) In Fear the Boom and Bust, Keyne’s describes the idea that too much spending is detrimental to the economy as that money is taken out of the circular flow. Though it is advantageous to individuals in the long run, in cases such as the Wall Street crash when the economy was at a decline, selling and saving money does nothing to counter the falling flow of money.
3) I agree with Hayek’s point in Part II of the Epic Battle when he states that “real growth means production of what people demand” in that production has to be planned and pointed and not simply created because of the available resources. Wasteful resources would simply push the economy even further into depression.
Mohammad Abdel-Aziz
Period 3
I would have to say that I agree and side more with Keynes for the following reasons:
1.) Keynes points out that the government needs to put more into government spending to help us out of recessions and as we have learned in class government spending is always the most effective.
2.) He emphasizes the importance of spending and how this keeps the flow of money within the circulation whereas storing money does not allow for the economy to grow.
3.) Lastly Keynes says that we need to be more focused on what is happening now and not wait for things to work themselves in the long run. I agree with this because I believe we need to focus on what is going on now and fix it for us and not just the people ahead.
1.The economy is run by the flow of money so if savings increase and the government does not stimulate the flow of money, the nation will go deeper into recession.
2.A point made by Hayek, that is reasonable, is that he says that the people have control of how the economy is doing because we "are" the economy.
3.Lastly, I like the point that Hayek had in the second view when saying that spending can be the enemy because there is such a thing as too much spending including government spending which can be shown in our national debt currently.
I agree with Keynes more, due to the fact that in the first video he emphasizes that more government spending puts money back into the cash flow. In the same video he focused on aggregate demand and pointed out that by paying attention to it the economy will boost itself. Additionally in the second video he pointed out that the spending that went towards the war actually boosted GDP and lowered the unemployment rate.
Personally, I'm in favor of Hayek's ideology..
1. In the first video he stated that over spending will cause inflation, which isn't good for the market.
2. And also I'm not in favor of the government always attempting to bail out those "loser companies"
The invisible band should just be left to do its job and the government shouldn't be involved in the economy at all.
I agree with keynes in the first video, thoughts on guiding the economy rather than just let it be free.
Second I agree with Hayek that we shouldn't count on war to fix the economy and unemployment because thats only temporary in the second video.
Third I side with keynes that we increase consumer spending by decreasing savings in the first video.
Anthony Chenevert
3rd Period
I agree with the Keyenesian principle of government spending to stimulate an economy. If things were done the supply sider way I would highly doubt that most of that money gets pumped back into the economy, because of greed. During a recession people are more likely to save, and during a recession this idea seems like, to me, that you just give a bunch of paranoid people the last chance at saving the economy, but no one would do anything because they're too scared of being the one to lose everything. With government spending, one can at least reasonably assume most of the money is going where it needs to go. Keynes is correct about the multiplier creating a healthy infrastructure for the economy, and his theories did help immediately recover the economy from the Great Depression. However, I believe that laissez-faire policies help in many of the ways Hayek described.
Anthony Chenevert
3rd Period
I agree with the Keyenesian principle of government spending to stimulate an economy. If things were done the supply sider way I would highly doubt that most of that money gets pumped back into the economy, because of greed. During a recession people are more likely to save, and during a recession this idea seems like, to me, that you just give a bunch of paranoid people the last chance at saving the economy, but no one would do anything because they're too scared of being the one to lose everything. With government spending, one can at least reasonably assume most of the money is going where it needs to go. Keynes is correct about the multiplier creating a healthy infrastructure for the economy, and his theories did help immediately recover the economy from the Great Depression. However, I believe that laissez-faire policies help in many of the ways Hayek described.
Period 1
I agree with Keynes more, even though both economists have understandable viewpoints.
1) Keynes says that in order to get out of recession, money must be in circulation. Thus, people should not be saving during recessions but rather spending smartly. As long as money is circulating, the economy will be able to recover ("Fight of the Century").
2) Government stimulus in a recession allows money to circulate. With less consumers purchasing products, demand falls, wages drop, and the economy suffers. However, if the government is willing to take part in stimulating the economy, more people will begin to purchase more goods, and the economy will grow. ("Fear the Boom and Bust")
3) Hayek's point concerning government intervention brings up a good point. People who make poor economic decisions are put there by the "invisible hand". By giving them more money, resources are being placed in the wrong hands, and the consequences of this action will be harmful in the long run.
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