Help! This Keynsian guy says government CAN AND DOES create wealth..refutations?

Economics Economics Questions
21

Hold on everyone weigh in on Captain Keynsian’s newest whopper:

wealth is anything with market value, insofar as the market values it. that includes fiat currency.
period. when the number of dollars scales evenly with the amount of goods produced via those dollars, the value of the dollar stays static. the economy grows.
and it keeps growing. as with the worldwide economy, it has kept growing for centuries, and will continue to do so and that’s because of the trade benefits of comparative advantage. but comparitive advantage is too complicated for most Austrians, despite the fact that it is undergrad economics.

22

when the number of dollars scales evenly with the amount of goods produced via those dollars, the value of the dollar stays static.

We live in a world in which money bids up prices relative to each other, not mechanistically, instanteneously, and proportionally. If money was to affect all goods the same, at the same time, and proportionally then we’d call money neutral, but money is not neutral. Money has real effects on the real economy.

23

could you expound on that?

24

I don’t see what any of this has to do with the notion of the government creating wealth. But just taking this by itself, it still isn’t really saying much. It sounds like all he’s saying is that if the amount of goods increases and there is also a proportional increase in the amount of dollars, then prices stay the same. I say, so the hell what? He’s not doing anything to explain anything. He says that and then jumps right into “the economy grows”…as if it were any sort of explanation for the growth.

And what’s even more ridiculous is the language of “the amount of goods produced via those dollars”. I’d love to hear an elaboration on that…because that sure sounds like he’s contending that dollars produce goods/wealth.

25

@sam29

what was your resonse to the keynesian on the topic on wealth?

26

Underpants gnomes can and do create wealth!

27

442×334 71.2 KB

28

@Isaac

Basically that which has been said in some of this discussion: I said that wealth is not paper, that it is owning stuff.

29

But what of his insistance that we don’t know the difference between money entered in the computer and paper money in circulation?

30

That’s exactly the problem isn’t it? has he switched sides in the debate?

31

we as Austrians have a problem with flooding the economy with paper money. the keynsian’s argument was that we (Austrians) do not realize that money in the computer does not flood the market and that our argument is undermined by this.

32

keynesians believe electronic money to be sterile? are they that nuts?

33

Expand your thoughts man, haha give more than a sentence

34

Do they believe electronic money is never spent? it has no purchasing power?

in that world you could tell it apart (functionally) from paper money, you can’t spend it like money.!

35

I agree. Electronic money still contributes to an overall increase in dollars, right?

36

spot on. so what was your opponents point?

37

Sam29, is it possible to bring your friend here? For a dinner

38

Haha I would love to get him in a room with all of us.

But his point is that that electric money has no bearing on the value of dollars as long as we are producing at even pace with our printing (or entering).

39

And if I stood him on q treadmill would he say that his walking forwards had no bearing on his position if he walks at the rate of the tread?

40

Thumbs up for positive attitude!