First to Roger, I am sorry for not replying yet to your imp. arguments.
Christian writes:
>Yeah, yeah, yeah. Keynesianism is dead. Long live Keynesianism.
Active fiscal Keynesianism is dead, and has been so for quite some time. Reagan's deficits were passive ones. Of course in the best Keynesian manner the prosperity of the 80s depended on social consumption, not on investment. The fact that this was done not on the behalf of laborism, as Schumpeter feared, but the highest income receivers is simply another one of history's jokes in poor taste, as Stolper has wryly noted. And the debt continued to increase as % of GDP until tax revenue came in a few years ago from unprecedented equity inflation from massive capital inflow. Hardly a sustainable situation.
>
>Japan isn't a case of fiscal impotence, but stop-start fiscal austerity.
>From 1993-96, the %age changes in central government spending have been .2%,
>1.0%,-2.9%, 5.8%, respectively.
Isn't the point that despite the 'timidity' of such % change in fiscal expansion the debt/GDP ratio just simply mounts? Why this is so begs for some explanation.
Surprisingly, the year of 5.8% central gov't
>expenditure increase, GDP in Japan rose by 3.6%. That's not to say that
>Japanese fiscal policy is necessarily good, but it certainly hasn't
>exhausted itself.
Nobody denies that fiscal programs can increase 'production' in the short run. I deny that they are investments in public 'capital' however.
> "The fiscal card has been played" sounds like American
>neo-liberal triumphalism--or the Financial Times op-ed page.
Please...How is saying that there may well be no exit from the next depression other than revolutionary action 'triumphalist'? I am not holding my breath till the FT, including Martin Wolf, comes to this conclusion.
>Besides, how
>much do you want to bet that, come next recession, US discretionary spending
>caps go out the window?
Of course it will have to go through the roof because revenues will crash as well. But as the debt/GDP ratio also skyrockets, how far up disc spending can go remains a great question especially if big government spending inspires fear of destabilizing inflationary pressure and future onerous taxes and undermines further private investment. The working class will need be prepared to take the situation in its own hands, instead of waiting for the govt to find a solution or accomodating itself to the situation by, say, trying to move back to the land in Waltons-like fashion (should be plenty of reruns of that show in the future).
>And besides all that, since when has the arsenal of tactics of the
>bourgeoisie been comprised by fiscal spending? What was Greenspan's
>post-Asian crisis interest rate policy? (As I recall, Daniel Davies called
>it "interest-rate Keynesianism.")
The main effect of which within the US has been to incite even more speculative mania on the stock market and a troubling current account deficit that now requires Greenspan to raise interest rates to fend off speculative attacks on the dollar. This is not Keynesianism or any coherent theoretical program but brinkmanship, bound to fail soon.
>I wouldn't have thought you bought this kind of messianic eschatology. What
>gives?
What's messianic about coming to the conclusion that the contradictions of capital can only be overcome by the working class taking matters into its own hands? Dismissing this as messianic sounds so...i don't know...cold war hawkish, revisionist and tired.
yrs, rakesh