Re: To libertarians / Rand clones
 

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Are you seriously denying that the war did not have a positive impact on the economy?

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Yes.

Are you seriously claiming that war can have a positive impact on the economy? If so, how?

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Ok, we made a few thousand airplanes and and tanks. We made millions of uniforms as well. Do you think the GDP increased because of this?

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Of course not. Where did the money come from?

If you can help the economy by making uniforms, why not just pass a law requiring everyone to wear jumpsuits? Would all of the men wearing uniforms have gone without clothing if FDR didn't force them to wear uniforms?

Absurd.

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Do you not see an increase in production of airplanes, tanks, jeeps, ammunition, guns? What about salaries for soliders (were they paid?)?

The money was loaned. Ever heard of a deficit? Also, did since there was huge unemployment, and then many people were hired for the war effort, does that not increase GDP?

Re: To libertarians / Rand clones
 

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Would you say in general that war is not good for the economy? I remember hearing in a speech by george bush that war is bad for the economy and thought to myself that is obviously false. Perhaps I am mistaken. Do you claim that war is always (or almost always) bad for the economy?

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I have addressed this previously. War is always -EV. It can't possibly be +EV. Here's what I've written previously:

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Well, let's look at the aspects of war.

There's control of resources (land, oil fields, whatever). This is basically EV neutral - either you control it or I do, we can't magically make more appear. Some of these resources will be destroyed during the conflict, but we'll account for that later.

There is the production aspect (tanks, bullets, bombs, etc). If this were +EV, why wouldn't we just build a bunch of bombs and constantly drop them in the ocean? Then we would get the supposed benefits of the increased production without killing anyone. Obviously, this production (in and of itself) is not beneficial, or else it would be conducted outside of war.

Next, there is the destruction (of buildings, infrastructure, etc). This obviously must be -EV, or else we would indiscriminately destroy things all the time. Of course, we do destroy buildings outside of war, but only when the alternative use of the property is higher than the value of the existing building. War destroys these useless buildings, but also destroys useful infrastructure (and in fact, seeks to destroy the most useful things).

Finally, there is the killing. Pretty clearly this is -EV. I hope that isn't up for debate.

So, every aspect of war is basically -EV (or neutral at *best*). On top of that, every aspect of war also violates human rights. Force is not a legitimate means of controlling property; taxation is not a legitimate means of increasing production; destruction of others' property is criminal.

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Re: To libertarians / Rand clones
 

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Hey TomCollins, please don't talk to me. Thank you!

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When I say something that violates the terms of services of 2+2, I'll stop responding to you. You are free to put me on ignore. Other people read your posts, and they are free to read mine. If you feel I have done something that violates the terms, report me to a moderator. I have only attacked your ideas and arguments/talking points.

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Yeah...lol...stop doing that! It's like in Liar Liar:

Jim Carrey: OBJECTION!
Judge: On what grounds?
Jim Carrey: Because it's very damaging to my case!

Re: To libertarians / Rand clones
 

pvn, would you agree that paying people to dig ditches, and then fill them improves GDP?

I'm not asking if it makes sense or is +EV. I'm sure you see the difference.

Re: To libertarians / Rand clones
 

So, just to clarify, after a war, the country is in worse economic shape?

Re: To libertarians / Rand clones
 

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Would you say in general that war is not good for the economy? I remember hearing in a speech by george bush that war is bad for the economy and thought to myself that is obviously false. Perhaps I am mistaken. Do you claim that war is always (or almost always) bad for the economy?

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War is always bad for the economy. The claim that war is "good" for the economy is a tired old canard, unless your country is being invaded. Then I suppose a war could be good for your economy, in the sense that you and your fellow citizens are fighting to retain control of the factors of production.

To make war, particularly on foreign soil, you have to spend a lot of money. That money has to come from somewhere. There are only two places that it can come from. Taxes and inflation of a fiat currency supply. Well, three places if you include war spoils. But America famously does not pay for her foreign wars through war spoils.

Every dollar you tax from the populace to pay for a war is a dollar not spent in the economy somewhere else. Yes, you are providing more business for the people who make tanks and guns and bombs. But you are taking business away from whomever those dollars would have been spent on. In other words, the broken window fallacy. He who believe that war is "good for the economy" sees only the tanks and uniforms. He does not see the private automobiles, the suits, the Sunday dresses, that would have come into existence but now never do, because the would-be consumers do not have those dollars (not to mention the fact that the would-be consumers are shipped across the globe to die abroad rather than spend at home).

Furthermore, manufacturing tanks and uniforms is a double whammy on the economy, as these "goods" (I would call them bads) are virtually guaranteed to totally depreciate within a few years. In other words, become worthless. Either the tanks will become smoking piles of junk on the battlefield (a battlefield halfway around the globe where you cannot even recover their metal for scrap value, a foreign nation will), or they will become militarilly obsolete in 5 years and end up parked in a desert somewhere. Bombs and bullets are worst. The factors of production are wasted to produce something that is guaranteed to be destroyed. A defensinve war is different of course; the factors of production used to create bullets and guns to repel an aggressor produce a demonstrable value, security and liberty.

The other source of funds is to increase the amount of fiat currency in circulation. In other words, print a lot of money and buy tanks and uniforms with it. Hey, free tanks! Not quite. What this does is to enrich the first receivers of the new currency (for example the arms manufacturers). They will then have more money to spend in the general economy, which allows them to bid up the prices of commodities (because the demand has increased). So they get to purchase the commodities at the old price (before magic money has been printed), bidding up the prices, which then must be paid by the rest of the population if they want those products. In other words, fiat currency printing makes a few people richer at the expense of every one else, who are now poorer, because their dollars now buy fewer goods. This is inflation. And it is nothing but a particularly brutal and hidden regressive tax. And we have already dealt with taxes.

Re: To libertarians / Rand clones
 

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Are you seriously denying that the war did not have a positive impact on the economy?

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Yes.

Are you seriously claiming that war can have a positive impact on the economy? If so, how?

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Ok, we made a few thousand airplanes and and tanks. We made millions of uniforms as well. Do you think the GDP increased because of this?

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Of course not. Where did the money come from?

If you can help the economy by making uniforms, why not just pass a law requiring everyone to wear jumpsuits? Would all of the men wearing uniforms have gone without clothing if FDR didn't force them to wear uniforms?

Absurd.

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Do you not see an increase in production of airplanes, tanks, jeeps, ammunition, guns? What about salaries for soliders (were they paid?)?

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So what? New windows. It doesn't matter what can be seen. What matters is what you cannot see, because it will not now exist.

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The money was loaned. Ever heard of a deficit?

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Loaned? Loaned by whom?

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Also, did since there was huge unemployment, and then many people were hired for the war effort, does that not increase GDP?

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Wouldn't it make more sense to hire them to build giant pyramids then? The pyramids will not be sent overseas to be blown up.

Incidentally, why do you think there was huge unemployment?

Re: To libertarians / Rand clones
 

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So, just to clarify, after a war, the country is in worse economic shape?

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It depends on what you mean. Certainly after a foreign war, a country will be in worse economic shape than it would have been without the war, all other things being equal. But it may be in better economic shape after the war if for example, a suite of idiotic public policies that had caused a protracted depression were (largely) finally dispensed with. Hint hint.

Re: To libertarians / Rand clones
 

Prior to the war our nation faced an estimated 25% unemployment. During the war we had something around -5% unemployment (105% employment). Anyone who understands basic macroeconomics and the production possibilities curve can understand what 105% employment means for a nation and its economy.

Re: To libertarians / Rand clones
 

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pvn, would you agree that paying people to dig ditches, and then fill them improves GDP?

I'm not asking if it makes sense or is +EV. I'm sure you see the difference.

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Yes, it certainly improves GDP, as defined.

Technically, giving a homeless guy a buck doesn't increase GDP, but giving a homeless guy that squegees your window a buck does.

Re: To libertarians / Rand clones
 

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pvn, would you agree that paying people to dig ditches, and then fill them improves GDP?

I'm not asking if it makes sense or is +EV. I'm sure you see the difference.

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Yes, it certainly improves GDP, as defined.

Technically, giving a homeless guy a buck doesn't increase GDP, but giving a homeless guy that squegees your window a buck does.

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And a massive government spending program (way more than what the New Deal did, on the scale of WW2) will provide a boost to the economy, since people getting the money will then be able to buy things. This of course comes at the expense of people in the future since it is usually done in deficit spending. Keynsian economics works (whether its justified or +EV in the long run is another debate). The problem with Keynsian economics is that it requires a HUGE cost to get any beneift.

Re: To libertarians / Rand clones
 

Just prior to the start of the war, our nation's unemployment was hovering around 20%, and many economists feel our unemployment estimates are very understated.

The New Deal clearly did not work.

Re: To libertarians / Rand clones
 

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Keynsian economics works

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It was my understanding that Keynsian economics had been thoroughly debunked (or thoroughly refined if you were to ask a new/post-Keynsian economist).

Re: To libertarians / Rand clones
 

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Keynsian economics works

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It was my understanding that Keynsian economics had been thoroughly debunked (or thoroughly refined if you were to ask a new/post-Keynsian economist).

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Perhaps the EV nature of it.

Re: To libertarians / Rand clones
 

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pvn, would you agree that paying people to dig ditches, and then fill them improves GDP?

I'm not asking if it makes sense or is +EV. I'm sure you see the difference.

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Yes, it certainly improves GDP, as defined.

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No, actually, it doesn't. Hiring a guy to dig a ditch and fill it in doesn't increase GDP at all. How could it? The only sense in which GDP "increases" is by the amount of fiat currency you print up to pay the man with. Which means not at all, since printing money can only dilute the currency supply, not create any actual increase in the wealth of the nation.

Are you claiming that inflating the money supply is "good for the economy" ?

Re: To libertarians / Rand clones
 

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Keynsian economics works

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It was my understanding that Keynsian economics had been thoroughly debunked (or thoroughly refined if you were to ask a new/post-Keynsian economist).

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It has been. Half a century ago. Pretty much as soon as Keynes invented it.

Re: To libertarians / Rand clones
 

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Furthermore, manufacturing tanks and uniforms is a double whammy on the economy, as these "goods" (I would call them bads) are virtually guaranteed to totally depreciate within a few years.

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So according to you, going from making 300 airplanes a year to making 100,000 airplanes a year is bad for the economy because the airplanes depreciated either immediately or within a few years.

And so therefore it is also bad that our computer companies produce and sell several million computers per year, since these are guaranteed to depreciate within several years as well.

err, huh?

Re: To libertarians / Rand clones
 

Keynsian economics works.

If by "works" you mean never-ending malinvestment booms and inflation alternating with crashes, recessions, and depressions characterized by high unemployment and business failures as the market attempts to liquidate those malivestments, then sure. It "works."

Re: To libertarians / Rand clones
 

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Keynsian economics works.

If by "works" you mean never-ending malinvestment booms and inflation alternating with crashes, recessions, and depressions characterized by high unemployment and business failures as the market attempts to liquidate those malivestments, then sure. It "works."

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It temporarily raises GDP at an overall cost.

Re: To libertarians / Rand clones
 

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Furthermore, manufacturing tanks and uniforms is a double whammy on the economy, as these "goods" (I would call them bads) are virtually guaranteed to totally depreciate within a few years.

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So according to you, going from making 300 airplanes a year to making 100,000 airplanes a year is bad for the economy because the airplanes depreciated either immediately or within a few years.

And so therefore it is also bad that our computer companies produce and sell several million computers per year, since these are guaranteed to depreciate within several years as well.

err, huh?

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The point is that funds were diverted from what consumers would otherwise have purchased, and is hence clearly not spent on those other aread of the economy, no matter how quickly those private goods would or would not depreciate. At least if the government builds a bridge, people will be able to use it for decades. When they build a tank, it will very quickly become useless. Comparing this to computers voluntarily purchased is fallacious. In that case consumers are getting what they want, even if what they want depreciates rapidly.

Re: To libertarians / Rand clones
 

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Are you claiming that inflating the money supply is "good for the economy" ?

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No, I'm just saying that there are ways of increasing GDP that don't really do anything useful.

Re: To libertarians / Rand clones
 

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Keynsian economics works.

If by "works" you mean never-ending malinvestment booms and inflation alternating with crashes, recessions, and depressions characterized by high unemployment and business failures as the market attempts to liquidate those malivestments, then sure. It "works."

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It temporarily raises GDP at an overall cost.

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And this is a good thing how?

Re: To libertarians / Rand clones
 

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Are you claiming that inflating the money supply is "good for the economy" ?

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No, I'm just saying that there are ways of increasing GDP that don't really do anything useful.

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Sorry, by "you" I actually meant Tom there. My apologies.

Re: To libertarians / Rand clones
 

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Furthermore, manufacturing tanks and uniforms is a double whammy on the economy, as these "goods" (I would call them bads) are virtually guaranteed to totally depreciate within a few years.

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So according to you, going from making 300 airplanes a year to making 100,000 airplanes a year is bad for the economy because the airplanes depreciated either immediately or within a few years.

And so therefore it is also bad that our computer companies produce and sell several million computers per year, since these are guaranteed to depreciate within several years as well.

err, huh?

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Except that those computers, while they are depreciating, do work that people actually value.

Re: To libertarians / Rand clones
 

I'm impressed with how this thread turned out. From a stupid question in the beginning to a fairly intellectual debate about economic policy.

Now if only all the dumb threads started here could turn out so well...

Re: To libertarians / Rand clones
 

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It temporarily raises GDP at an overall cost.

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And this is good? I can see making an argument for it *if* GDP were *exactly* the same thing as "economic health*, but it's not. As you've shown, you can manipulate GDP without actually doing anything useful. Therefore, not everything that increases GDP is "good".

Generally, having a body temperature of 98.6 is good. If you get a fever, I can get your body temperature to 98.6 by shooting you in the head then placing your body on a heating plate set at 98.6. Hey, I got your body temperature to the desired number, it must be a good thing, right?

Re: To libertarians / Rand clones
 

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So, just to clarify, after a war, the country is in worse economic shape?


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Given the general term "economic shape" this really isn't a matter of opinion. You know the dates of major US wars. Can you not simply look at a US GDP (the ultimate "general shape" indicator) trend chart and look at the dates following our wars and come to your own conclusion?

Re: To libertarians / Rand clones
 

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Keynsian economics works.

If by "works" you mean never-ending malinvestment booms and inflation alternating with crashes, recessions, and depressions characterized by high unemployment and business failures as the market attempts to liquidate those malivestments, then sure. It "works."

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It temporarily raises GDP at an overall cost.

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And this is a good thing how?

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I never said it was good. However, it is a nice secondary benefit when other reasons dictate massive spending.

Re: To libertarians / Rand clones
 

I did this. What do you think my results were?

Re: To libertarians / Rand clones
 

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It temporarily raises GDP at an overall cost.

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And this is good? I can see making an argument for it *if* GDP were *exactly* the same thing as "economic health*, but it's not. As you've shown, you can manipulate GDP without actually doing anything useful. Therefore, not everything that increases GDP is "good".

Generally, having a body temperature of 98.6 is good. If you get a fever, I can get your body temperature to 98.6 by shooting you in the head then placing your body on a heating plate set at 98.6. Hey, I got your body temperature to the desired number, it must be a good thing, right?

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Notice I never made a value judgement about good or bad. If I say "shooting somoene in the head will usually kill them" doesn't mean I advocate it.

Re: To libertarians / Rand clones
 

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Except that those computers, while they are depreciating, do work that people actually value.

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And in determining the raw value of economic production, where does the "what the people actually value" factor in? I don't believe it does.

I sure was pissed off when I bought a Gateway. It was a total piece of junk and brought no value to me. My consumption (C) of $2000 still factored into GDP, however. Just like the government spending (G) on 100,000 airplanes factored into GDP.

On a related note, many technology innovations and efficiencies came about from World War II as well, which also factor greatly into the GDP growth rate. And some would say such things as the entire airline industry came into existence because of World War II.

Re: To libertarians / Rand clones
 

I don't think anyone doubts that some good things came out of it. But the question is, what is the cost? Is it +EV?

Re: To libertarians / Rand clones
 

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Is it +EV?

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I'd imagine to the freedom loving people of Western Europe, the Jews, the Gypsies, among others, yes, it was +EV. Long term economically speaking.

And clearly to the United States it was +EV.

I of course am staying entirely within the context of the Second World War.

Re: To libertarians / Rand clones
 

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It temporarily raises GDP at an overall cost.

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And this is good? I can see making an argument for it *if* GDP were *exactly* the same thing as "economic health*, but it's not. As you've shown, you can manipulate GDP without actually doing anything useful. Therefore, not everything that increases GDP is "good".

Generally, having a body temperature of 98.6 is good. If you get a fever, I can get your body temperature to 98.6 by shooting you in the head then placing your body on a heating plate set at 98.6. Hey, I got your body temperature to the desired number, it must be a good thing, right?

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Notice I never made a value judgement about good or bad. If I say "shooting somoene in the head will usually kill them" doesn't mean I advocate it.

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You have said in this thread that it will give a boost to the economy. Whether you advocate it or not, your statement is incorrect.

Re: To libertarians / Rand clones
 

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So, just to clarify, after a war, the country is in worse economic shape?


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In worse shape *than it would have been in, had there been no war*.

Of course the country could be in better shape after a war, since war is not the only factor influencing the "economic shape" of a country. But, if there had been no war, it ought to be *in further "better shape" yet still*.

Re: To libertarians / Rand clones
 

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Keynsian economics works.

If by "works" you mean never-ending malinvestment booms and inflation alternating with crashes, recessions, and depressions characterized by high unemployment and business failures as the market attempts to liquidate those malivestments, then sure. It "works."

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It temporarily raises GDP at an overall cost.

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And this is a good thing how?

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I never said it was good.

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No? That's funny because, double negatives aside, I'm pretty sure that exactly what you were trying to imply when you wrote this:

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Are you seriously denying that the war did not have a positive impact on the economy?

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If not, what was the point of this question? And indeed your whole argument about increasing GDP with worthless projects like foreign wars and digging holes?

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However, it is a nice secondary benefit when other reasons dictate massive spending.

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What reasons would those be?

By the way, I've asked many questions in this discussion and you've ignored most of them. Is this going to be a trend? Because if I'm wasting my time I'll just stop.

Re: To libertarians / Rand clones
 

This is a very important distinction. It is also (probably) not measurable (like so many things in economics).

Re: To libertarians / Rand clones
 

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Maybe in a very stretched out way (like the economy would be worse off if Hitler invaded the U.S. Otherwise, monster wars like WWII are a waste of people and resources.

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I'm not saying its not a waste. I'm simply stating that it improved the economy.

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I suspect the difference here may be due to: Tom looking at short-term stimulus versus PVN looking at long-term genuine benefit (or lack thereof, or anti-benefit).

Homer lunch
 

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FDR ... did incalculable damage to this country.

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The evidence of ignorance spreading among the masses of Americans is right here, in this thread.

How much have you guys read about FDR and that era, aside from the texts of those already agreeing with your viewpoint ?

Re: To libertarians / Rand clones
 

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pvn, would you agree that paying people to dig ditches, and then fill them improves GDP?

I'm not asking if it makes sense or is +EV. I'm sure you see the difference.

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I want to go back to this point.

Yes, paying someone $100 to dig a ditch and fill it back up increases GDP. Just giving someone the $100 for no work would not increase GDP. In this comparison, if you think that paying the guy is better for the economy than giving the money away, you're actually subscribing to the labor theory of value.

Wait, did I just say that giving the $100 away would be better for the economy? Yes. In that case, the laborer has the $100, plus he's still available to do someting actually useful.

Now, let's ignore that minor distinction. The more interesting question is whether paying someone $100 to dig a ditch and fill it in is better than not. Clearly, when your $100 has alternative uses, it's better to save the $100 and spend it on something of value. This is worse for the ditch digger, but better for me and for whoever actually provides useful services.

Well then, what if the $100 comes out of a magical barrel of money that never runs out? If you don't understand inflation, then we probably need to start a whole new thread. Even if we had a magical barrel of money that never runs out AND doesn't cause inflation, it STILL would be a bad idea to pay for ditch digging and filling, since we could in that case just give the money away.

Note that *all* of this changes if someone places a pipe or a cable in the ditch before the guy fills it back in. In that case, the sponsor may be able to generate more than $100 by transporting gas or water or data through the conduit in the ditch.

Now, maybe I have some weird psychological thing and I just enjoy watching people work. It's an entertainment expense, perhaps. In this case, however, I would either hire people to build useful things (such as ditches for pipes), so that I could recoup my expense, or I would simply go to constuction sites and watch people work for free.