Sé: If the world economy is heading to a period of deflation, then I'm not convinced that the sort of spend that Brown has promised will be sufficient.
Karl: I cannot subscribe to your argument. Even if Brown were to increase state spending by a putative "sufficient amount" it would not necessarily led to real economic growth. Sé: Effectively, you are denying the validity of a Monetary intervention to burn out of recession. I don't think that's right. If Brown could borrow £10 trillion and spend it within the British economy - I'm pretty sure that it would grow GDP to an extent which would pull the economy out of its current dip. Karl: You undermine your own argument. "If Brown could BORROW..." But then he would borrow. If he does not borrow it is because he cannot borrow. Why should he not borrow on that scale if it is as simple as you suggest. Indeed why should the Tories not borrow too if it as simple as that. If massive borrowing can solve the economic crisis for capitalism then it is the interests of the capitalist class to borrow. Response: My argument is that Brown's intervention is insufficient. You're argument was that it would be ineffective even if he could increase state spending by a putative 'sufficient amount'. To disprove your position, I state that £10 trillion state spending would pull Britain out of the recession. You counter that this is cannot be delivered. The problem is that you are confusing two issues: (a) Whether Governments can spend their way out of recessions - i.e. in your words whether "Even if Brown were to increase state spending by a putative "sufficient amount" it would not necessarily led to real economic growth" and (b) Whether it is possible to borrow a 'sufficient' amount - i.e. in your words "If he does not borrow it is because he cannot borrow." I think that I have clearly demonstrated the first argument to be true. With limitless or *sufficient* state intervention, an economy will expand - that afterall is quite obvious. Your second *strawman* argument is something I'm not going to disagree with you - the ability to borrow is limited by the ability to pay back. Given New Labour's inability to raise taxes by a sufficient amount, their ability to borrow must be tightly controlled. My initial post explained I felt that Brown's intervention was too little to really impact - I did a calculation on the impact on employment - and I noted it was more for internal consumption than any other reason. I think that you have adopted my arguments but projected them to an outright rejection of state intervention in a capitalist economy - i.e the position that Keynesian economics is entirely worthless to the working class. Your drawing a parallel between Keynesian and Monetarist economics is the corollary. As I have stated before, I am a Marxist not a Keynesian but that doesn't mean I reject state intervention outright in the current situation - particularly if the intervention is beneficial in direction [I'm just not convinced that this is the case]. Your projection is something I can live with but it's implications in terms of strategic orientation is where we differ. Sé _________________________________________________________________ Chat with friends online, try MSN Messenger: http://messenger.msn.com
