US gubmint shutdown + default + subprime sequel?

[Subotan]

This is if you believe in a Keynesian economic policy which the USA has subscribed to for decades. This does not make it right.

whaaaaaattt

[Centurion1]

whaaaaaattt

Through the 1950s, moderate degrees of government demand leading industrial development, and use of fiscal and monetary counter-cyclical policies continued, and reached a peak in the "go go" 1960s, where it seemed to many Keynesians that prosperity was now permanent. In 1971, Republican US President Richard Nixon even proclaimed "we are all Keynesians now".[18] However, with the oil shock of 1973, and the economic problems of the 1970s, modern liberal economics began to fall out of favor. During this time, many economies experienced high and rising unemployment, coupled with high and rising inflation, contradicting the Phillips curve's prediction. This stagflation meant that the simultaneous application of expansionary (anti-recession) and contractionary (anti-inflation) policies appeared to be necessary, a clear impossibility. This dilemma led to the end of the Keynesian near-consensus of the 1960s, and the rise throughout the 1970s of ideas based upon more classical analysis, including monetarism, supply-side economics[18] and new classical economics. At the same time, Keynesians began during the period to reorganize their thinking (some becoming associated with New Keynesian economics); one strategy, utilized also as a critique of the notably high unemployment and potentially disappointing GNP growth rates associated with the latter two theories by the mid-1980s, was to emphasize low unemployment and maximal economic growth at the cost of somewhat higher inflation (its consequences kept in check by indexing and other methods, and its overall rate kept lower and steadier by such potential policies as Martin Weitzman's share economy).[19]

There was a lack of consensus among macroeconomists in the 1980s. However, the advent of New Keynesian economics in the 1990s, modified and provided microeconomic foundations for the neo-Keynesian theories. These modified models now dominate mainstream economics.

FDR also obviously followed to a form of Keynesian economics as well. I never said any of the people using it were necessarily purists nor that it was an unbroken chain of proponents of the theories of Mr. Keynes but at least some form of Keynesian policy was used. There was a break in the 80's when it fell out of favor following the economic failures of the 1970's and altered theories came to prominence in the 1990's till now which I believe would alone constitute the term "decades"

so yeah....... pretty easy stuff to find out on your own so that you don't have to be corrected trying to correct me.

[Subotan]

It has only become mainstream within the past three years or so. Prior to that point, from about 1982 onwards, "Keynesian" was practically a pejorative.

[Centurion1]

It has only become mainstream within the past three years or so. Prior to that point, from about 1982 onwards, "Keynesian" was practically a pejorative.

False. New Keynesian theories came to prominence in the 1990's. And even Reagan's supply side economics ironically had some Keynesian trappings when he put the oodles of money he had into Defense.

[Strike For The South]

What nation does not subscribe to some level of Kensyian economics?

[Major Robert Dump]

Call me paranoid, but the appearance of Giffords at the end of this debalce proves to me that this was all a manufactured incident, particularly if ones considers we had the exact same dance with the budget a few months back.

This is Washington's way of reminding us that they are on control. The appearance of Giffords was Washington's way of reminding us that Washington cares. During this pre-planned crisis, Washington and their cronies likley got richer, as Congress is exempt from insider trading laws.

[Xiahou]

The deal itself is a total sham from what I've seen of it. The only real cuts are the cuts that take place in 2012. And they amount to about 2/10ths of one percent of federal spending. If trimming a fraction of a percent from our bloated government nearly collapsed civilization as we know it.... we're pretty well screwed aren't we? As so often is the case with Congress, this was a meaningless gesture.

Remember when it looked like we'd be buying back all of them government bonds in the '90s? There was a lot of panic about what effect not having government debt would do. Seems so naive and quaint at this reserve.

It's worth noting that even in the glorious 90's we were only running a surplus if you didn't count entitlements. In reality our budget problems were still mounting even then.