[Classical Liberal]

(Original post by KentaKobashi)
Oh brilliant, you are insulting and patrionising me. Money comes from trees I'm sure.

Just like you did you little pussy.

And you don't know. Well done on discrediting yourself.

[KentaKobashi]

(Original post by Classical Liberal)
Just like you did you little pussy.

And you don't know. Well done on discrediting yourself.

No, I know. I just don't answer patronising questions seriously from people who think it's pertinent to just insult my intelligence with meagre questions. Plus, the question was loaded to begin with, and no matter how correct I am, you are probably just setting me up for some more insulting and patronising. I know how trolling works, boy.

Humbly speaking, I know far more than you do on economics which I why I answered your question sarcastically, safe in the knowledge that you are probably either an A level economics student or a PIR student at uni, with little or no grasp of any macroeconomic principles.

EDIT: Oh, it's even worse. You are a libertarian. Seriously dude, I'm trying to help you out. When you go to uni, and if you do study economics, you will learn in your 1st year that Austrian school of economics and libertarianism is a load of baloney.

[pshewitt1]

(Original post by KentaKobashi)
Quantitative easing by way of giving money to the public doesn't work. Let's say we give every person in the UK £5,000.

5,000 x 70,000,000 = 350,000,000,000 or £350bn.

Sure, it sounds like a lot, but it is very short-termist. People will either save or spend the money, so if they save it, it ends up with the banks anyway. If they spend it, they will spend it on exports so the money leaves the economy. Whatever they spend domestically, UK firms will gain in revenue. However, that is by no means saying that it will lead to long term or even short term economic growth. Firms may become more profitable for a very short while, but they will sit on this money until someone else, say a bank or government, make a move. In short, you may feel good about having £5,000 extra, but essentially that is all it is. It will solve nothing. You need to invest in projects like creating buildings, infrastructure, ways to support and better society as a whole. Then faith, as well as utility is more embedded in they economic system and it works from there.

The is also the liquidity trap. Look it up for yourself, it's 1:52 am and I am pooped, so I won't explain it. But getting to tell whether we are in a liquidity trap requires two symptoms. High inflation and high unemployment. However, in saying THAT inflation was at 2.8% last time I checked and unemployment is going down slightly so time will tell whether we still are in a liquidity trap.

to add to the critique you've had below, 70 million wouldn't be paid that... you're counting in children etc...

[KentaKobashi]

(Original post by pshewitt1)
to add to the critique you've had below, 70 million wouldn't be paid that... you're counting in children etc...

I grant you that, it was just an oversimplification for the purpose of an example..

[Classical Liberal]

(Original post by KentaKobashi)
Humbly speaking, I know far more than you do on economics which I why I answered your question sarcastically, safe in the knowledge that you are probably either an A level economics student or a PIR student at uni, with little or no grasp of any macroeconomic principles.

Answer the question. Or do you not know the answer?

EDIT: Oh, it's even worse. You are a libertarian. Seriously dude, I'm trying to help you out. When you go to uni, and if you do study economics, you will learn in your 1st year that Austrian school of economics and libertarianism is a load of baloney.

[jesusandtequila]

(Original post by KentaKobashi)
EDIT: Oh, it's even worse. You are a libertarian. Seriously dude, I'm trying to help you out. When you go to uni, and if you do study economics, you will learn in your 1st year that Austrian school of economics and libertarianism is a load of baloney.

Having done 2 years of Economics at Cambridge, I'm becoming more and more convinced that it's mainstream economics that just doesn't deal with the real world at all.

[jumpingjesusholycow]

(Original post by Sure is Summer)
Banks simply need to be cut up and slashed. We need to avoid banks that are 'too big to fail'.

Little late now isn't it? Our nation's success has ridden on the back of the financial services industry for over a decade.

[KentaKobashi]

(Original post by Classical Liberal)
Answer the question. Or do you not know the answer?

I think I just told you that I did know the answer. Come on, at least ask me something harder.

(Original post by Classical Liberal)

By all means, don't refute what I said.

I also noticed you read Dan Ariely's "Predictably Irrational", so at least you aren't totally naive.

But then again, you are a fan of Ayn Rand. Ayn Rand is a kook, nothing more. She has some good points like objectivism which sound utopian in theory but the reality is is that they just don't work in practise. I think my suspicions about you were correct in that you read or watch something and are completely influenced by it, without any questioning of your own. You do realise that Ayn Rand's economic ideals of Liassez Faire economics and the video you posted in your first post in this thread are completely at odds with each other?

Liassez faire economists and Ayn Rand believe that markets should be absolutely free and that if a market fails, then it is simply because it is inefficient and that no government should interfere to try and solve the problem. Something Ron Paul also adheres to.
Your video on the other hand calls for the completely opposite. It calls for the government to interfere though monetary policy by a form of quantitative easing, which is the opposite of Ayn Rand's ideals.

I think your heart is in the right place but I think you are too influenced by what is currently hot at the moment. It's good to read around and question your government but to be fair to myself, you did ask the question and I answered it for you. I think it's a bit insulting that you ask an economics graduate "where does money come from?" just because I questioned the video you posted. Somehow I doubt that you would be doing the same to an economics lecturer. You can look in a textbook, it's there in black and white. Giving money to the wider population doesn't work. Do you honestly think you are smarter than a central bank? Do you not think that if this was the solution that after 3 years we wouldn't have already tried it? This is the problem with economics, everyone has an opinion. It irks me too because I know that Economics is a science but the answers to questions such as yours are clouded in a sea of opinion.
Physics doesn't have this problem. When people have a question, physics performs experiments and then we find an answer and everyone is satisfied. In economics, we try the same but you will get certain people who either don't like the answer because it is against their best interests or you get people who are already sure before the experiment has even begun about what the answer is an will shout down, insult and lobby to have the results cast out because it conflicts with their prejudged beliefs. Sadly, I'd put you in the latter camp.

[KentaKobashi]

(Original post by jesusandtequila)
Having done 2 years of Economics at Cambridge, I'm becoming more and more convinced that it's mainstream economics that just doesn't deal with the real world at all.

Since graduating, I feel the same way. Economics teaches you the theory, but there are so many assumptions and constraints put in place that it just doesn't apply to real world scenarios.

[RyanT]

(Original post by jesusandtequila)
Having done 2 years of Economics at Cambridge, I'm becoming more and more convinced that it's mainstream economics that just doesn't deal with the real world at all.

+1

I've graduated from my degree and have similar sentiments.

[Recon1424]

Tax the super rich (like 90-95%) and segregate banks into investment and deposit.

The problem is that there is too much of a gap between the 1% and the 99%. The 1% cant do much to stop the 99% so just tax them really high and invest this into things like infrastructure, military, industry and education and the economy will boom. Then split the banks into investment banks and deposit banks where customers are aware of where there money is going. Its history - just look up what Roosevelt did to end the depression in the USA and this is it.

We dont need QE we need to rise up against the elite 1% and even out the table again.

[KentaKobashi]

(Original post by Recon1424)
Tax the super rich (like 90-95%) and segregate banks into investment and deposit.

The problem is that there is too much of a gap between the 1% and the 99%. The 1% cant do much to stop the 99% so just tax them really high and invest this into things like infrastructure, military, industry and education and the economy will boom. Then split the banks into investment banks and deposit banks where customers are aware of where there money is going. Its history - just look up what Roosevelt did to end the depression in the USA and this is it.

We dont need QE we need to rise up against the elite 1% and even out the table again.

Whilst I agree with you, I think that it is a lot more difficult in practice because getting a lot of people to behave the same way is not effective. It's like trying to get people to use less energy and waste less. If you use less energy, the effect it has on global warming is marginal and only works if everyone does it. Since most people don't the effect is smaller and as a result, less and less people do it with time. Same is here too. "Rising up" is only good if we all do it. But only 1% of the 99% will do it and so it's much harder. Good post anyway.

[D.R.E]

(Original post by KentaKobashi)
Liassez faire economists and Ayn Rand believe that markets should be absolutely free and that if a market fails, then it is simply because it is inefficient and that no government should interfere to try and solve the problem. Something Ron Paul also adheres to.
Your video on the other hand calls for the completely opposite. It calls for the government to interfere though monetary policy by a form of quantitative easing, which is the opposite of Ayn Rand's ideals.

This is the problem with economics, everyone has an opinion. It irks me too because I know that Economics is a science but the answers to questions such as yours are clouded in a sea of opinion.
Physics doesn't have this problem. When people have a question, physics performs experiments and then we find an answer and everyone is satisfied. In economics, we try the same but you will get certain people who either don't like the answer because it is against their best interests or you get people who are already sure before the experiment has even begun about what the answer is an will shout down, insult and lobby to have the results cast out because it conflicts with their prejudged beliefs. Sadly, I'd put you in the latter camp.

For someone who is supposedly an economics graduate, you don't half talk nonsense.

[Recon1424]

(Original post by KentaKobashi)
Whilst I agree with you, I think that it is a lot more difficult in practice because getting a lot of people to behave the same way is not effective. It's like trying to get people to use less energy and waste less. If you use less energy, the effect it has on global warming is marginal and only works if everyone does it. Since most people don't the effect is smaller and as a result, less and less people do it with time. Same is here too. "Rising up" is only good if we all do it. But only 1% of the 99% will do it and so it's much harder. Good post anyway.

Thanks man, I learn't from watching this video if your interested (long but worth it):

http://www.youtube.com/watch?v=_-Kqe...feature=g-hist

Hes actually talking about the USA so im not sure how much of this applies to the UK.

Its just when news stories like this are floating around http://www.bbc.co.uk/news/business-18944097 and people just accept austerity its a real eye opener to realise there's actually loads of money out there we just have to take it and this whole thing could all be over.

[KentaKobashi]

(Original post by D.R.E)
For someone who is supposedly an economics graduate, you don't half talk nonsense.

What's with the blatant ad hominems?

Serious question, is that what libertarians do? Attack people?

By all means, refute what I say, but insulting me? Come on.

[KentaKobashi]

(Original post by Recon1424)

http://www.youtube.com/watch?v=_-Kqe...feature=g-hist

Its just when news stories like this are floating around http://www.bbc.co.uk/news/business-18944097 and people just accept austerity its a real eye opener to realise there's actually loads of money out there we just have to take it and this whole thing could all be over.

Thanks man, I'm not going to watch the video though, it's way too long and I have to make dinner and stuff. Maybe tomorrow. Though I did scan the description section and there are names such as Joseph Stiglitz, Paul Krugman and others who I have read and think are correct on the current direction of our economy, so I will probably agree with whoever is speaking in the video.
(Though to those out there who aren't like me, I am open to you criticising these economic principles and debating them)

As for that article, yeah I read it, it is mind blowing if true. $21 trillion is enormous; a figure I just don't think people can fathom. It's something like 21 football pitches stacked with $1 bills as high as a Boeing 747. And that's just a conservative estimate.
It's twice the GDP of South East Asia, Latin and South America, Africa and the Middle East combined! That's enormous.

[D.R.E]

(Original post by KentaKobashi)
What's with the blatant ad hominems?

Serious question, is that what libertarians do? Attack people?

By all means, refute what I say, but insulting me? Come on.

There wasn't any serious argument to refute in your post. Ayn Rand was not an economist, she was a political and moral 'philosopher'. Calling her a kook does not erase the mounds of economic theory supporting free market economics. And one could argue that in one sense or another, most economists believe in the free market (even Keynes). On top of that, you clearly don't even know anything Ayn Rand advocated beyond that rather facile assertion that she believed in 'absolutely free' markets.

You then go on the attempt to equate the 'scientific rigor' found in modern economics to that found in physics. Which is quite possibly the most stupid thing anyone with any serious knowledge of economics - as you claim to say - could say. Then you go on about 'clouds of opinion' surrounding economics forgetting that you are just adding more to that cloud yourself.

No science is devoid of opinion, you are just attempting to denigrate the views of people who disagree with you using rhetoric to lend your views some kind of intellectual superiority which they evidently do not possess. Economics is in turmoil because the current paradigm is broken and doesn't work, the same would happen if all of a sudden physicists started throwing around nonsensical models based on frivolous assumptions.

[KentaKobashi]

(Original post by D.R.E)
Ayn Rand was not an economist, she was a political and moral 'philosopher'.

But she held the economical views that "laissez-faire capitalism [is] the only moral social system because in her view it was the only system based on the protection of those rights" which conflicted with the thread creator's video.

(Original post by D.R.E)
Calling her a kook does not erase the mounds of economic theory supporting free market economics.

No, but two depressions and the fact that Keynesian economics, statistically speaking has done more for economic growth in the 50's up to the 80's than free market economics has ever achieved does.

(Original post by D.R.E)
And one could argue that in one sense or another, most economists believe in the free market (even Keynes).

Yes, but not laissez faire capitalism. I even believe in free markets, but there are limits - to paraphrase Paul Krugman. Absolute free markets, which Ayn Rand advocates, is destructive and counteracts many examples we see day to day.

(Original post by D.R.E)
On top of that, you clearly don't even know anything Ayn Rand advocated beyond that rather facile assertion that she believed in 'absolutely free' markets.

I do, and it's completely down to you whether you choose to believe me or not. I'm not gonna lose sleep over whether you do or don't.

(Original post by D.R.E)
You then go on the attempt to equate the 'scientific rigor' found in modern economics to that found in physics. Which is quite possibly the most stupid thing anyone with any serious knowledge of economics - as you claim to say - could say.

Again, here we go with ad hominem attacks. By all means disagree, but at least say why. Don't just read something and say, "well that's stupid" and walk away.

(Original post by D.R.E)
Then you go on about 'clouds of opinion' surrounding economics forgetting that you are just adding more to that cloud yourself.

Well then the fact that I am adding to this 'cloud' is proving that it is there.

(Original post by D.R.E)
No science is devoid of opinion, you are just attempting to denigrate the views of people who disagree with you using rhetoric to lend your views some kind of intellectual superiority which they evidently do not possess.

No, no science is. But some sciences are more devoid of opinion than others and I think economics is less devoid than any other because it is such a personal science. It is affecting economics so much so that I feel that it is actually destructive to the science's progress itself. It's difficult to quote journals and come up with a dissertation on a message board but I rely only on statistical evidence (if you believe that). It's not being "intellectually superior" because I base my findings on statistical evidence, econometrics and published journals. I'm willing to debate but all I get from libertarian insulting people who disagree with them. I have done none of that. Saying you are wrong is not an insult. Currently, I am pursuing to try and understand about the cracks in our current economic systems. Obviously, yours and mine clash, but I am not denigrating, I am merely stating, from the basis of the mounds of journals I read weekly, and the growing consensus with economists and professors, that the video posted by the thread starter has some enormous intuitive holes in it.
Besides which, as a libertarian, I am surprised that you do not see how interference with monetary policy as described in the video does not conflict with you being a libertarian.

(Original post by D.R.E)
Economics is in turmoil because the current paradigm is broken and doesn't work, the same would happen if all of a sudden physicists started throwing around nonsensical models based on frivolous assumptions.

Precisely.

[D.R.E]

(Original post by KentaKobashi)
...

You seriously need to grow a thicker skin than that; it's not like I came in here saying something irrelevant like "your mother is a whore". By the way, I disagree with the video about as much as you do, I was responding to your comments about libertarians and such.

Anyway: your argument that Keynesian economics did more for economic growth in the 50s and 60s flies in the face of pretty much every historical record in existence: ever heard of this word, 'stagflation'? I'm sure you have, seeing as you have just graduated from an economics degree. You'll probably come up with examples like France or Germany which saw year on year GDP 'growth' of about 4-7% in that time period, but it's very easy to post numbers like that when your entire infrastructure base has been bombed to ashes. And even if we were to take that view of yours at face value, policies have consequences; and the consequence of the Keynesianism of the 50s and 60s was the 70s and 80s. Thank you very much Keynes!

As for your two depressions, the first was caused and exacerbated by government action, and then you had the second world war which apparently 'boosted' economies - well, only the US because everywhere else was getting smashed to bits - according your lovely Paul Krugman; which calls into question the idea that GDP is a meaningful measure of what economic growth is.

But there are more fundamental questions than that. You and I look at economics in very different ways, and this has very little to do with me being a libertarian: it's about how we think about the methodology of economics. Statistical evidence is useful to an economist, but only use in context. It only gives you a glimpse of one particular time-frame with certain conditions, incentives and economic actors in play. There is very little that can be extrapolated from that snapshot to other scenarios. And this is specifically why economics will never resemble physics no matter how much econometricians like to lie to themselves.

In physics, the models work because they are working with very basic actors which have very limited behavioural patterns, and can be manipulated in a variety of ways by the physicist. It's very is to say, ceretis paribus, we can expect the same results because the same conditions can be replicated: an example being the recent 'discovery' of the Higgs-Boson particle. None of this is possible in economics because the actors are far more complex and it is impossible for the observer to replicate conditions in any meaningful sense. Which means the models created from this are pretty much all useless.

The only similarity between physics and economics is that both use a lot of mathematics, but in one it's just not doing very much.

[D.R.E]

I also love how some econometricians talk about regression as if they've found some magic wand that will give them the answer to every question that has ever existed...