Equilibrium:
Clayton,
The resources have no alternative use. There is no opportunity cost for x number of years where x is a number too large for any decent and sane person to allow the resources to stay idle (hence “in the long run we’re all dead”).
Huh? The only two people bringing up this nonsense argument both said they don’t even buy it. I ask why even bring it up, then…and your response is that I don’t know about or must not be interested in “the real argument” in favor Keynesianism? All I asked was why you would bother bringing up an argument you didn’t even believe was correct, and somehow I’m attacking a straw man?
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Again, if you don’t buy the argument, why is that the argument you’re bringing up and defending?
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If the argument you’re defending is not “the real argument”, again why bring it up, and why don’t you enlighten everyone with this supposedly unknown “real argument” for Keynesian fiscal stimulus?
You attacked a straw man when commenting on the effectiveness of wwII as fiscal stimulus. Pointing out the straw man is why I commented here in the first place, and I did not wish to allow you to distract from that purpose, thus my response to you. Also, you seem confused. I did present the real argument.
Let me put it this way: you call this argument nonsense. What about it is nonsensical?
“Government spending during WW2 put people to work,”
It does that now.
“put money in their pockets,”
It does that now.
“stimulated private spending and investment,”
It does that now. Are you saying this is always a good thing?
“created demand for more products,”
Can you expound on how the demand is created. You’re just saying it was. It can be assumed that if you give someone money they will spend or invest it. It cannot be assumed that it creates demand in an individual. The demand might already have been there, but there was no money. It might be possible to say that it is a bad thing. For instance, what if all the money is used to pay off debts? Wouldn’t the lenders raise their lending rates, with their now grim outlooks for future income via interest?
“created the middle class as we know it.”
Can you describe this process? Are you saying that there was no middle class before, or that the middle class was different afterward? Is that good or bad, and why? Who is the middle class?
“Whereas Reaganomics destroyed all of the above.”
What are the terms that make something Reaganomics? We should discuss this to make your explanation relevant. Define. Also, some examples of how these things were destroyed.
“Shipped jobs overseas,”
Please explain how Reaganomics did this. Is Reaganomics an acting party in itself? How did these “shipped” jobs remove money from pockets? How did it hamper spending and investment? How did it reduce demand for products? How did it destroy the middle class, as we know it?
“gutted the middle class,”
Can you describe this “gutting” process? What does it entail? How does it happen? Who does it? Why?
“reduced domestic investment,”
What specific act reduced domestic investment? Is it always better to have domestic investment, even if opportunities outside a nation have promising returns? What role might such returns play?
“increased unemployment,”
Did it? If so, by what application? Are there other factors that might have contributed to unemployment?
“lowered wages,”
Were wages lowered across the board, or only in some areas. In the areas that were lowered, were they already being held artificially high? If so, does this always have negative effects? Should we always be raising wages? What are the implications of lowering wages? Were they artifically lowered?
“deregulated speculators,”
Was the regulation good? Is that merely an opinion? Were they still somewhat regulated? At the time, were they TOO regulated? What were the regulations? How were the regulations having an impact to begin with"
“lowered income taxes on the richest upper class,”
Is this a bad thing? Is it always bad, or just sometimes? Should taxes always be raised? Is there a ceiling for when it becomes a problem to raise taxes? How is that ceiling determined? What is the lower limit for taxes? Is it always appropriate to raise taxes for the upper class and lower them for the lower and middle class? How are the classes distinguished?
“and facilitated the greatest income redistribution towards the upper classes since 1920s.”
Was it a redistribution, or was it earnings? Should we consider all earnings as a redistribution? Is redistribution always bad? If so, was it proper to do so with the New Deal? Is redistribution okay as long as it isn’t to the upper class? Who did the distributing? Was the redistribution a function of Reaganomics? If so, was Reaganomics a mandate that was being followed rigorously at all times during that period? Does this have any bearing on whether or not any of this is truly related? Are there other factors?
“In other words, created all the prerequisites for an economic collapse,”
Are all those things prerequisites for an economic collapse? Are there other things that could also be prerequisites? How do they relate to each other? How do they relate across a timeline to the economic collapse itself? What are the causal relations? ARE THERE OTHER FACTORS?
“which promptly came in 2008.”
Was it prompt? Were there people that saw it coming earlier? Were they predicting it via the prerequisites you described above?
“So now you’re argument is: do nothing, don’t change anything, keep all the things that brought us here, keep pushing the gas pedal after you’ve plunged off a cliff and into the sea.”
Is that the argument? Is it possible this is a loose interpretation of an argument? How does the argument work or not work? Is the entire argument false? Did anyone actually make the argument that pushing the pedal while falling down a cliff is the way to go? Are you implying that the argument is to keep doing what we are doing? Was the argument saying to keep doing what we are doing, or was it saying something else? Is it possible it was an argument that we should stop doing certain things that we are currently doing? Is this really just your personal interpretation of the argument? Have we plunged off a cliff? Are there things we can do that will help? What are those things? Is doing nothing automatically a bad thing? What if we do something that makes it worse? What is the argument against the argument? What might be negative consequences of the alternative proposal? ARE THERE OTHER FACTORS?
Where did I do that?
I must have missed it then. Could you please explain what the “fake” argument is that you “don’t buy” and then “the real argument” that you supposedly presented and why they are different?
You just acknowledged the fact that I wasn’t even aware you presented an argument that you actually agreed with. If you’d like me to tell you what it is that makes an argument nonsense, you’ll have to present an argument you don’t think is nonsense. See the request above.
Your first comment on this thread as well as your responses to me.
I don’t buy the real argument, which I presented.
To quote myself: “Obviously, war and fiscal stimulus in general won’t have any positive effects on the business cycle. It can only do good during an event like the Great Depression where all this resources you’re worried about being misallocated aren’t being allocated at all, people are saving (hoarding) all their money because they have no jobs and nothing to invest in, and businesses are not investing and hiring because no one is spending any money. That’s what fiscal stimulus is for. Government provides people income, creating a demand for products, businesses rush to supply the demand now that there are willing buyers, savings and investment are reunited, and the free market can go back to allocating resources and producing wealth.”
I am not persuaded by the above argument, but no one here has even shown knowledge of or a willingness to grapple with this argument, let alone the ability to refute it.
beg to differ, Coase, but am interested in what you consider the refutation.
Can’t say. Top secret. Paradigm-shifting paper forthcoming and all that.
I’m sure the Earth will shake when it comes out
So I wasn’t “confused” as you claimed. It was exactly as I said. Your entire presence here has been to introduce an argument that you admit even you do not believe is viable.
So I ask you again, if you don’t buy the argument, why is that the argument you’re bringing up and defending? Based on your comments so far, the answer is “you want to have something to say, but can’t actually voice an argument you actually believe because it is the subject of a “top secret” earth-shattering paper…so you just waste time posting nonsense even you don’t buy into.”
I must admit…I’ve never heard the “top secret paradigm-shifting paper” excuse. Most people who don’t have an argument but want to pretend they do anyway just stick to the ol’ “I could do that…I just choose not to.”
Now I’m confused, but whatever. I presented the argument to show that you all were attacking a straw man, which I disapproved of.
I don’t want people stealing my work. 
Paradigm-shifting paper…
I can see the headlines now: Idealogical Shocker! New Report Answers Question of How Social Order Comes About Through Hand of Government, Rights and Liberties Maintained.
Turns out it was hot dogs. The answer was in hot dog production all along.
Of course, the tragedy is that the paradigm-shifting paper falls to the wayside, because the front page is splashed with the headline: Social Engineer Demonstrates Causal Relationship.
Bullshit, they can always be scrapped. Car plant sitting idle? Tear down the robots and sell them as scrap. Car plant building empty? Let it go on the market… someone will find a use for an empty, solidly built building (long-term storage, airplane hangar, whatever). What you’re saying is you don’t like the market price at which these idle resources are going to clear, which will be an infinitesimal fraction of the amount of gold that was poured into them during the boom.
*shrug
Clayton -
A funny example of alternative use I’ve seen today:
http://www.howtomakecider.com/build-apple-press.php
An old car jack (inverted) will act as a press.
So you can make some cider using a tool originally intended to prop a car.
The car jack is an idle resource since it’s not being used to jack up cars. Making apple cider is not a “use” of a car jack.
Clayton -
Clayton,
At that point it comes down to personal opinions and judgements.
Bullshit, they can always be scrapped. Car plant sitting idle? Tear down the robots and sell them as scrap. Car plant building empty? Let it go on the market… someone will find a use for an empty, solidly built building (long-term storage, airplane hangar, whatever).
Right, which is no economic downturn has ever lasted longer than, like, a day…
…Kind of like how no government has ever interfered with the economy for longer than, like, a day…