>1. How much has this deficit reduction come from, say, selling off the
>assets from the S&L disaster or privatizing state enterprises or
>conceding govt lands--sources of revenue which cannot be drawn from again
>and again?
In the U.S., a trivial amount. In Europe, probably a bit more but not all that much.
>Or how much has come from the taxing of fictitious capital that
>a few more bubble pricks will send up as hot air?
I think strong capital gains receipts have brought in about $10 billion more in the U.S. than would otherwise be the case. It helps, but the trends are real.
>And after substracting
>from GDP such fictitious wealth, how high are debt to GDP ratios corrected
>for the business cycle?
Got me.
>2. Why has Japan's efforts at fiscal stimulus shown no
>commensurate positive effect? Doesn't the absence of effect then
>undermine confidence even more as everyone doubts that the govt can lift
>the economy out of the depression? Isn't this a case of where it is worse
>to have loved and lost than never to have whored around with fiscal
>policy in the first place?
Worse by what measure? If you're a politician facing the next election, you just want to postpone disaster by 2 years. Don't forget that Japan raised the value-added tax in 1997, one of the dumbest acts of fiscal policy ever. According to the OECD, fiscal policy tightened pretty sharply in 1997 (1.4% of GDP), and again in 1998 (0.2%).
Here are the recent GDP growth figures (year-to-year) for Japan. You tell me if these make a "depression":
95Q1 +0.3% 95Q2 +1.4% 95Q3 +1.4% 95Q4 +2.4% 96Q1 +5.7% 96Q2 +4.2% 96Q3 +3.1% 96Q4 +3.4% 97Q1 +2.8% 97Q2 -0.2% 97Q3 +1.0% 97Q4 -0.4% 98Q1 -3.7% 98Q2 -1.8%
>3. Isn't Big Daddy Al merely saving his big bang of interest rate
>reductions for a very steep decline in America asset values or a real
>downswing in the American business cycle? Big Al only believes in loose
>money at the right time just as the market was flooded with liquidity in
>the 87 crash; he is just waiting to come out of the closet at the
>right time. Some like James Galbraith may want to out him now, but he'll
>be an advocate soon enough. And then he may well find himself, just like
>his Japanese compatriots, in one big liquidity trap.
Yeah, that's certainly the risk.
>4. Could any govt loosen and spend without wage/price controls; is this
>anything more than trying to get out of recession by increasing the rate
>of exploitation and therewith the production and capitalization of
>surplus value through machinations in the realm of circulation, i.e.,
>letting the price level grow at a faster rate than the wage level?
Since we're in a Keynesian mode, I'll turn Joan Robinson's assertion into a question - under capitalism, is it better to be exploited or not exploited?
>7. Why do the Keynesians keep on bellyaching about the monetarists? They
>had their day, and couldn't explain how there could be both unemployment
>and inflation. It's not the strength of monetarism but the historical
>failure of Keynesianism that explains the former's strength.
Monetarism is pretty washed up too, except in the Bundesbank, some Wall Street trading room, and the St Louis Fed. You should watch Erich Heinemann mutter about "long & variable lags."
Doug