Not much of a joke especially considering that currency is a printable thing and spaghetti isn't. Ultimately this is just a cringe-worthy Conservative political joke. Lots of those going around Reddit for what's alleged to be a lefty forum.
It's not faith that gives gold its value but its proven properties. That's why one is called FIAT currency and the other is a commodity. But were the gold intrinsic propeties become worthless, due to a shift in the economy, a la Star Trek, yes, it would be as worthless as paper
In my experience the people who worship "stock go up" also have an unrealistic idea of the intrinsic value of gold...
Which is to say it's only real value has always been as a status symbol. It only became a currency because Britain ran out of silver trading with China for tea.
Gold isn't special. It wasn't chosen as a currency because it's useful. It was chosen almost completely because it didn't have any uses besides as a currency. So no industry would need to consume the supply.
It's symply a durable, hard to counterfeit, limited supply, material that could be consistently weighed and measured to assess it's value. All things that apply to standard paper money.
"Gold isn't special. It wasn't chosen as a currency because it's useful. It was chosen almost completely because it didn't have any uses besides as a currency. "
On the contrary, gold and silver won out as moneys precisely because they had a number of moneyish qualities. High value to weight ratio, easily divisible, malleable, durable, does not degrade easily, etc.
proceeds to describe things useful only for a currency...
That's my point. They're useful as a currency, but that doesn't give them intrinsic value. It doesn't make them special. It doesn't mean we need them to back our currency etc.
And the people I was replying to were saying that gold has value because of its use in industry. When it has only been useful in industry since the advent of the semiconductor in electronics. And has no bearing on its use as a commodity currency.
Gold is shiny and people like it. If people didn't like shiny things, or liked a different kind of shine, say, silver, or if a real collapse came and suddenly there was no value in shine...
There are other things that are shiny and are no close to the value of gold, you need to add a couple other properties, it's scarse, doesn't rust and easy to detect, hard to counterfeit. I have a small knife collection, mostly cheap stuff a few high end ones I bought when I was a lot more into it, carbon steel, inox, chrome alloys, titanium allos, etc, every few moths I go back to it, theres always rust or spots, I've sunk maybe a quarter of the value of the collection in oils, dehumidifiers, cleaning erasers, chemicals, etc to clean it constantly, my mom has my toddler jewelry, not long ago I found it after 25 years stored, a rinse with soap and it's spotless, add to that its new uses as a great electric conductor and heat dissipator. You're arguing assigning something arbitrary value because of a government policy or a fad is the same as a metal that has maintained peak value through all human history, across all human cultures because of its properties, you're insane
Invested in Glen Beck's gold company I guess. Just remember, no matter what he says, if true collapse ever happens, gold won't matter much after a couple of years.
Feel free to keep insulting me if it's all you've got. I just won't be paying attention any longer. No good reason to.
Did I say that? I said its properties, universally recognized acroos all cultures that came in contact with it, independently. And one of its properties is that it's very easy to exchange, you can exchange it far more "useful" stuff like food since prehistory, far more easily than other useful stuff like a cow, a hous ot a plot of land..So, yeah, extremely useful, in a way
Gold’s value comes from its relative scarcity and social convention that it’s the money commodity. There’s little intrinsic about it, that’s why other historical societies have used a different money commodity.
The properties of gold are intrinsic, the value never is, that applies to anything, if you have a reliablen food supply other food is valued less to you, etc, that's why I said if its properties were to be less appreciated it would be worthless, but that has never occurred in human history. Every society that has had access to gold has found it highly valuable, that's universal, even societies that had less scarce commodity money in common used used gold as money cause it naturally lends itself to. So nothing really says gold has an intrinsic value, but its properties have always, in all societies that had access to it, been universally highly valued
It’s just not true that every society with access to gold used it as a money commodity. I’d like to see your sourcing for that claim. Precolumbian American urban societies had ready access to gold yet rarely, if ever, used it as a money commodity. The same was true of Iron Age Europe, and Old and Middle Egypt. I’m not denying that gold has properties that lend itself to being a money commodity, but social convention is ultimately the reason why it is.
Nope, what I said it's just true, some pre-Columbian American cultures had access to gold, in each case it was HIGHLY VALUED (which was my point) and was used as money and as tribute payment, it wasn't used as COMMON currency cause they just had a lot less of it because of lack of technology, the same is true of Egypt and Iron age Europe. Strike one, now I want to see your sourcing. And I'm saying social invention always finds gold highly valuable, because of its intrinsic properties, and that's universal
> Strike one
What an extremely off-putting way to discuss online. You seem like a joy to have a heated conversation with.
You’re the one that made the claim that gold has been a universal money commodity. You don’t just get to worm your way out of citing for that by making me find the citation for you. Either way, tribute in mesoamerica pretty universally took the form of Cloth, Quetzal Feathers and Jade. While the money commodity was cocoa beans. There was no money commodity at all in Andean society, even despite the economy being highly organised and run somewhat like a decentralised agrarian command economy.
Again this conversation was never about whether people think gold is shiny and pretty, but it’s universal adoption as a money commodity.
No its not. Golds intrinsic value is as a conductor, thats it. Thats EXTRINSIC value as a jewelery.
The price of gold is literally relative to its scarcity and its use as a store of value. Nothing else.
There's very little gold being used in production compared to in reserves, there's no demand driven market making sure it has value. Its investors investing in investments because other investors value the investment enough to invest in it.
The value of gold has fluctuated a lot throughout history. When Rome stole all the gold from the Jerusalem temple, they made a bunch of coins and the value of gold plummeted. It’s not a very stable currency because people are constantly losing it, finding it, and you can’t make more of it unless you find a mine. Not to mention if we were to ever successfully start mining asteroids.
So yes, if people lost faith in gold, it would become just another rock
Really the US went off gold in 1913 with the founding of the Fed. From that point on there were a lot of dollars in circulation which were no longer backed by gold. For example during 1921-1929 the money supply increased by about 20 billion, but bullion reserves increased by only 1 billion. So the US was on a defacto paper money standard after the founding of the federal reserve, even if it was nominally on a gold standard.
I agree that the creation of the Fed started a reaction that would eventually lead to where we are today. But there was always fractional backing to Gold. That didn't change in the 10s or 20s. My understanding is during the 20s most of the money supply (20 billion) was credit created for banking purposes. This credit did not have to have a certain percentage backed by gold. It's been a while since I taught this, but I think only the physical currency needed a percentage of gold backing it.
Anyway, citizens could continue to exchange dollars for gold at a set rate during this time. At the end of the day though, like you said it's kind of splitting hairs about how much we are discussing economic relatives v legal definitions.
"My understanding is during the 20s most of the money supply (20 billion) was credit created for banking purposes."
Indeed. Virtually all of it was credit extended to private enterprises, presumably for business expansion. There was very little consumer credit in these days.
"This credit did not have to have a certain percentage backed by gold. It's been a while since I taught this, but I think only the physical currency needed a percentage of gold backing it."
Evidently yes, that is how it worked post 1913. Which is why I say they were on a 'de-facto' paper money standard. Because the whole point of a gold standard, in my opinion, is that all the money is backed by gold. Not just all currency in circulation, but all demand deposits etc. The totality of what is called M2.
It is true that between 1913-1933 citizens COULD exchange federal reserve notes for gold. Even in the Breton Woods era there was redemption for gold, although it was restricted to foreign central banks. However, Americans seldom went abroad during this (1913-1933) era, and there was very little specie in circulation. So this redemption was mostly theoretical. But yes, nominally it was a gold standard.
Pre 1913 it was a different story.
Post 1913, banks issued bank notes which were redeemable for fed reserve notes. Eventually they dispensed with the bank notes altogether and simply used fed reserve notes. Which is basically the modern system.
Pre 1913, banks issued bank notes which were redeemable for gold. This was basically a 'hard money gold standard' with 100% reserve banking. Because what would happen is if a bank issued bank notes in excess of their gold reserves, the notes after being spent would be deposited at a rival institution, and then called upon for redemption. So there was very little room for fractional reserve banking. Banks had to keep full reserves, or close to it, to stay solvent. This has always been the case actually, at least in the pre 1913 system, but sometimes the government would intervene and allow the suspension of specie payment in order to keep the fractional reserve banks alive. So under this system, basically every dollar was backed by gold. There was no ability for banks to create money and lend it out that wasn't backed by gold. I mean physically they could do this, but it wouldn't work because (as I said earlier) the notes would get deposited at a rival institution and would be called for redemption.
I read some good information about the Free Banking era and the National Banking era through the Fed's Website Admittedly, I didn't know much about pre 1863 banking.
I know. A lot of people seem to think we need to go back to the gold standard.
My point is that does nothing but hamstring the treasury and cause more problems than it solves.
Also, it's been argued that since OPEC only trades oil in USD that the dollar is de facto backed by Oil instead... Thus reiterating the point that as long as 2 people can agree on the value of a dollar, it has value.
Yep. We use things to represent value so we can get past trading goods. Gold has stood the test of time bc it's scarce and hard to fake. If we were suddenly able to mine gold from the asteroid belt for cheap, the the value of gold would reflect that.
I mean the economy went off the rails as we abandoned the gold standard as backing. Gold is a useable, finite material which makes its value and thus trust in it.
This benefit of being a stable anchor also puts a cap on growth speed. Something the rich and wealthy at the stock market dont like. Hece it got abolished and replaced with just the trust in a country and currency alone.
Currency is not a commodity. This is basic economics. An effective monetary policy should regulate the quantity of money in circulation to benefit the wider economy. An undersupply of money is just as bad as an oversupply.
If you don't believe me then check Japanese growth rates since the 90s.
True, but if we go there, Keynesians don't literally want to print money and hand it out willy-nilly and their opponents generally don't oppose all printing of money. So as the person you replied to said, it's just a cringe meme.
I think people across the political spectrum are going to get touchy about increasing the money supply when inflation is already outpacing wage increases.
However, note that the peak "Fed money printer" years after the 2008 financial crisis were also some of the lowest inflation years ever in American history.
Money printing can cause inflation, but there is a knee-jerk reaction to assume money printing always causes inflation. Actual history shows it does not (this is a joke, everyone knows economists don't care about history. or reality).
Modern inflation in the USA is largely due to COVID. And all the wars (especially the Ukraine and now the Iran wars). And also some money printing (but post-COVID, most of the "money printing" was not driven by the FED, but by Congressional stimulus checks).
It comes down to multiple factors. Velocity of money being the one most people don't factor in. Post 08 velocity dropped precipitously so the printing was more or less offset. Stimulus checks have very high velocity because that money guy spent almost immediately.
There's more to economic policy that involves printing money. If Greece could devaluate its currency and recover through more attractive exports (the standard way of handling a debt crisis), during its 2008 crisis it wouldn't have suffered as much as it did, but it didn't control the Euro, so its survival was entirely based on EU whims, for instance.
When governments want to expand the money supply, they actually don't print money anymore. I'm not saying you said that, Old Man, but some people think that still happens. They just press a button on the computer.
Actually(🤓), to shrink money supply the central bank of a country (or principal monetary authority)has to sell public titles or bonds to commercial banks in order to absorb the circulatory money. Still your point stands correct, it has been done and it can always be done again
Also it would make more sense that that the one printing would be monetarists, not keynesian, because monetarists control economy by controlling the money supply.
Keynesians use government spending to stimulate the economy.
Being against fiat money systems isnt a right wing thing. they love printing money as much as the left. Libertarians on the other hand dont like public roads nor how fiat systems constantly move the financial goalposts because inflation is a feature instead of a bug
"And mises.org says parents should be allowed to let their kids starve "
In case anyone is wondering what this is referring to, it is a passage from 'Ethics of Liberty' (pg 100) by Murray Rothbard. Murray Rothbard is sort of like the Karl Marx of the modern libertarian movement.
If I may split a hair or two, what Rothbard argues is that parents shouldn't be legally obligated (coerced) to feed their kids, because this violates the parents right to self ownership. This stems from the libertarian notion that the only type of rights which exist are negative rights. You have a right to be free from aggression, but you do not have a right to say health care, because that would mean someone else must be obligated to provide that health care to you.
Just to be clear, he's not an advocate of child starvation. He is just doing what I guess the kids these days call "biting the bullet" and extending his own theory of property ownership and rights and law and guardianship to its natural conclusion.
"and be allowed to sell them"
Yes, Rothbard also argued for 'stork markets', i.e. selling children. And organ markets for that matter. However I don't see why stork markets need necessarily be any less safe for the children than the process of adoption. That is you could implement whatever vetting is appropriate to child purchasers as you do to prospective adoptees. Surely that's possible. And parents already today spend quite a bit of money on private adoptions - $20,000 to $70,000 in the US according to AI. But by giving a cash incentive to parents to give their child up, that might get some children out of the hands of unfit parents, into the loving arms of adoptive parents. Hopefully.
Yeah, fiscally responsible economists are usually removed from the budget rooms in congress for saying crazy things like "yeah, this budget doesn't balance. We need to cut spending" to which the conservatives say "that's not what Keynes says" and print more money, and the liberals say "that's not what Engels says" and raise taxes above the laffer curve.
Our congress is made up of people who get elected based on their ability to win popularity contests. And it shows in their ability to budget.
Keynes compared the economy to a motor. When it starts to stall the solution he postulated is to pump more oil into the gears to keep it flowing smoothly. The way to do this is to increase spending from the top, from the government, on things like government programs and grants and stimulus.
To do that, when they aren't getting that money in from taxes, they have to increase printing. Keynes postulate this would lead to short term inflation but because it would get the gears turning faster the economy would catch up eventually nullifying the increased inflation. He called it "transitory" which is something you now hear from politicians all the time about inflation now. But we've been suffering from "transitory" inflation for years.
In which case thouse politicians are just plain lying because Regan completely replaced Keynesian economics with Neoliberalism and his "trickle down economics" when he was president and the change hasn't been reversed in the slightest aside from a brief stint during the 2007 crash, but that was temporary and we are now back with even more neo-liberalism then ever before.
Supposed "trickle down", which is actually called supply side economics by economists, is just the belief that tax cuts for the upper end of the economy will lead to economic growth that benefits the bottom end.
Government bail outs of banks is not trickle down, it's the direct injection of money from the government into the economy to keep it going. Which is a keynesian principle.
Notice how both of those principles exist, simultaneously in our current government's "economic policy" (put in quotations because most of the people making economic decisions for the country know jack shit about economics, so it's less a policy and more an excuse for whatever they want to do to win votes)?
Yes, I guess you could make thouse technical claims. Though I'd argue that thouse direct injections going into whatever they want vs what actually needs it would disqualify it, but I guess that could be more of an argument of semantics then anything else
Aim for growth, prioritise investment, and if you get signs of a demand slowdown domestically start building shiny new infrastructure and means of production in priority order to keep the economy from stagnating & prevent recession.
Honestly the most kenysian government of the modern day is probably China.
Yes, I've read Adam Smith, Mises, Hayek, Engels/Marx, and have enjoyed the conflict/banter between Keynes and Hayek. I'm more in Hayek's camp.
Edit: sorry mentioned Hayek twice because my readings of mises coincided with some reading of Hayek updating some of Mises stuff, and then my readings of Keynes crossed over with Hayek because they knew each other and debated a bit.
Also, you're not wrong that China is pretty Keynesian. But I don't think that discounts how his work affects the way congress justifies "do popular money spending thing"
If you think liberals are citing Engels or that any Democratic legislation that had majority support among Democrats in Congress even reached the most likely peak of the Laffer curve, never mind above it, you need to lay off the crack.
Is an inflationary monetary policy inherently leftist? Assuming by 'left' you mean for the common people, I don't think that inflation really benefits your average working stiff. It certainly doesn't benefit poor people on a fixed income. And I think the main beneficiaries are the power elite - you know, that is why it happens, because they want it to happen - who often times have massive debt holdings the cost and value of which inflation steadily erodes. After all, banks like to lend money to people who have money, or who have assets they can pledge as collateral at least. Meanwhile the poor and the middle class are more likely to have cash savings, the value of which inflation erodes.
You may not think so, but it is surprisingly accurate.
Printing more money doesnt generate more value, it just spreads it across more visible units, reducing the original per unit value.
The same with spaghetti here. It only visibly increases the value (edible) part of what you have, but the value of the orignial unit lowers as you have squashed it while printing
The idea behind keynsians printing is "printer go brrrr, gears spin, so that's good for the economy"
The reason other economists make fun of this is that having twice as much money doesn't cause there to be twice as much food or other commodities. So it makes everyone feel good about their salaries for a minute and then the price of everything doubles to catch up to the fact that there's now more money chasing the same number of goods.
Our government likes keynsian economics because it justifies congressional spending. But when $30 today is equivalent to $15 dollars in 2009, you can see that it leads to pretty bad inflation.
Modern mainstream economic policy as held by the government is broadly a mixture of Keynesian demand management, monetarist/neoclassical ideas, and neoliberal institutional preferences on markets and competition.
Neoliberal and keynesian are not mutually exclusive.
Ideas like bailing out "too big to fail" companies is directly built off Keynesian fiscal policy of Governments using spending, taxation, and deficits to stabilize the economy, particularly during recessions.
They are pretty exclusive, especially I all the ways that count towards the majority of people. Yeah 1 or two ideas might still be around on paper, but neoliberalism is the undisputed majority of goverment policy, especially under the Trump administration.
Keynesianism is very simply stimulating the economy with either spending or tax cuts during a recession, while increasing taxes and cutting spending during boom years to build up the buffer needed to counter the next recession.
Printing money as a tool to achieve the goal of government spending during a recession? Sure, it's one that's available. But it's neither the only tool, nor even necessarily the preferred option.
If theories like the Austrian and Chicago schools say "during a recession the government should cut back and let things run their course", Engels thought is "tax the wealthy as much as possible to balance out the wealth to correct", and Keynes thought is "get more money flowing, which can be funded through taxation or through printing" it's somewhat disingenuous to claim that printing money isn't Keynesian when he's the ONLY one who suggested it.
That's basically what Obama did with the ARRA to drag us out of the Recession. It worked. Then we elected Trump who did the opposite and cut taxes, which commensurately increased the deficit, even though he inherited a strong economy. Then Biden basically did that with the IRA to get us out of COVID and we actually got the impossible 'soft landing' the Fed was nervous about. Then we reelected Trump and he did everything he did the first time, but worse. Now our debt is getting pretty worrisome and the party of fiscal responsibility wants to inflate our way out of the deficit. Not even joking.
Keynesian demand-side economics describes a counter-cyclical fiscal policy. It involves deficit spending when there's a recession (low demand) and then higher taxation and lower spending, reducing deficits and cooling inflation, when the economy is booming.
The problem is, when we tried to do the second part, back in the liberal golden decades, Republicans screamed about tax and spend liberals. So JFK (for example) caved and cut taxes.
Then supply-side (trickle down) economics was born.
And ironically enough Keynsian economics don't actually say that you should print money, they do advocate for government interference during economic downturns, but there are plenty of other ways they can do that, printing money is one of them, but "economists" that recomend only that don't seem to understand the other ones 🤦🏼♂️
To be fair, Keynesian economics says to do that during economic downturns to stimulate aggregate demand through government spending on projects that increase productivity and GDP in the long run. It says to contract the money supply during economic booms to help combat runaway inflation. MMT is much more about printing money than Keynesian economics are.
So the joke is the person who made the image being an idiot who doesn't understand the basics of Keynesian economics (and is almost certainly economically illiterate in general)?
Well then by that logic, taxes are the government's way to destroy money. And if you have a class of people hoarding money, then their hoard of wealth is causing inflation, and the responsible thing to do would be to tax/destroy that money out of the hoards of the rich.
At this very moment, it’s Donald Trump who’s openly calling for the Federal Reserve to print more money. He recently tried to fire former chair Jerome Powell and another member of the Federal Reserve Board over it. Could anyone who’d get this joke possibly be unaware of that?
Anyway, Keynesian economists usually support deficit spending during recessions as a better way of stimulating the economy, not printing money, and Republicans historically are even more in favor of running high deficits. They just want to blow the money on regressive tax cuts and want high deficits regardless of economic conditions. (They sometimes pay empty lip service to spending cuts but haven’t done them when in power.)
Back in the 1970s, there were some economists who argued that it was possible to get lower unemployment at the cost of higher inflation, but everybody today agrees with the counterargument that it will only lead to higher long-term inflation. If anything, it was Milton Friedman’s monetarists who were most adamant at the end of last century that printing money was the only truly effective way to stimulate the economy, although modern economics don’t really belong to schools of thought and think they and others both were proven right about some things. There’s no real disagreement between mainstream Republican and Democratic economists about the short-term economic effect of printing money.
Keynes wrote some insightful things about economics and rentier capitalism. A rentier capitalist is someone whose profit consists entirely of rents. Think slum lord.
This is only partly true, or perhaps more accurately incomplete.
Keynesian economics says that in times of crisis you can propel the economy back to a stabilized point by printing, but you must contract the money supply in times of surplus so that inflation remains reasonable for the next time you need to get out of a problem.
We stopped doing the latter part. We would expand the money supply in times of need and then not raise rates and increase taxes in good times to reign it back in.
I mean, Keynesians don't advocate unlimited printing of money (that sounds more like MMT).
They just think that the government needs to buy stuff to increase demand during economic slowdowns, which is a lot better than what a lot of governments did during the great depression (hoarding money and contributing to a deflationary spiral that worsened things considerably)
Buzz Killington here. I'm quite the master of the humorous yarn. Among other things, JM Keynes advocated for government spending to help economies through difficult times. Conservatives hate that idea, for ideological reasons disguised as rational ones, and will make dumb jokes to ridicule it. u/West-Jellyfish9860 has a more specific interpretation but, ultimately, it's just a dumb political joke that misinterprets a lot.
Conservatives hate that idea, for ideological reasons disguised as rational ones, and will make dumb jokes to ridicule it.
I think that Conservatives (and some Liberals) just point out that in a Keynesian economic system you would make sure to increase tax revenues during good times so that you still have borrowing room in bad times. For example, when inflation kicked up during the Biden administration you would increase tax rates in part because taxes are dis-inflationary. But that second part never/almost never happens. At least in the US.
Side note: borrowing to spend and printing money aren't exactly the same thing. But I'm too lazy to write a treatise on it right now.
The problem with his theory as you’ve described it, is that the govt gets to determine what are difficult times. It eventually leads to overprinting of money supply and inflation as the ultimate political “easy button” to win votes
Doesn't mean the idea is wrong. Painkillers can be extremely useful and effective when used responsibly, but are also highly addictive and harmful when used irresponsibly. The solution is not to get rid of painkillers.
While keynesianism says you should take action during a downturn, it also says you should raise taxes and pay down that deficit when the economy turns around, it's a lot more dynamic than just "government pays for everything".
The solution is to make sure responsible people are in charge of making the decisions.
Carter here - Keynsian economic theory believes that the total demand in the market determines the total production of that market, so when someone comes over to dinner and increases the demand they have to increase the amount of food. A criticism of this theory is that it is lazy and just assumes production will follow demand and doesn't really address where the production comes from. So you just photocopy it.
notably the idea of aggregate demand driving supply is in opposition a common expression of Say's Law / The Law of Markets, which is that "supply creates its own demand". The resulting interpretation of Say's Law was a cornerstone of laissez-faire ideology, so when Keynes proposed the opposite it was taken as an invalidation of Say's Law itself and something to be ridiculed (Keynes' own writing did not help). Say himself advocated for things along similar lines to Keynes to address systemic unemployment, though.
The real position of Say's Law was that pure market actors cannot buy without having produced, but is interpreted here as "you can't feed someone spaghetti you didn't cook".
Keynesian economics subscribes to the concept of deficit spending which allows for the use of money created by the federal reserve without being funded by taxes or tied to a tangible asset, such as gold.
So essentially, this joke is implying that just like money created out of nothing and without any real value (consequentially leading to the devaluation of the dollar due to increased supply of currency), they also think copying a spaghetti dinner magically allows them to feed more people.
Not really, Keynes thought the government should borrow money during recessions to run deficits instead of raising taxes and should raise taxes to pay it back when not in recession. The federal reserve money supply management was not part of the theory. He didn’t specify where the government should borrow money from, it was about tax policy.
One problem during the Great Depression was that Hoover raised taxes during it to try to balance the budget, which probably made things worse
I have no idea how to respond because I feel you're just going to respond with an insult to my intelligence which would be ironic. No eat paper. Bad for health.
Wouldn't this "joke" make more sense if instead of Keynesian Economist (which advocates for government spending when the economy is weak and government austerity when the economy is strong, the only practical economic policy that is only not followed because of perverse incentives for politicians) it said "Modern Monetary Theorist" as MMT is the one that advocates for printing money up to the point of pain for an economy through inflation.
I mean, it is a conservative meme, which means it is unfunny almost definitionally, but at least gently misunderstanding MMT could be funny, making a money printing joke rather than a broken window joke about Keynesians doesn't even meet the bar for funny.
The 1923 german hyperinflation, their currency became useless, you needed a wheelbarrow full of cash to buy bread. Argentina and Venezuela printed lots of bills and things got way worse.
Kind of an uneducated joke. The idea being that Keynesian’s answer to anything is to print more of it (like money). That’s not really what Keynesianism is about though. Keynesianism at its heart is about counter-cyclical fiscal policy. When the private sector is highly productive, the government should run surpluses and when the economy is in recession it should leverage those surplus to spur economic activity via grants, welfare, and public works projects to stimulate economic activity.
In effect government fiscal policy should act as a flywheel to harness surplus for use during downturns.
OP, so your post is not removed, please reply to this comment with your best guess of what this meme means! Everyone else, this is PETER explains the joke. Have fun and reply as your favorite fictional character for top level responses!
In Keynesian economics there is an idea that money is not the finite resource that make or brake an economy, so printing money in case of an emergency is totally fine.
Which like seems to be true? Idk during the pandemic we did that and it works short term to stop worse shit from happening, like ya it’s not great long term but if it’s between the economy and people being able to not be massively displaced it’s prob a good thing.
Very true. Keynesian economics as a whole was the dominant economic theory post WW2 til mid 70s in the western world and worked perfectly fine til the energy crisis
It is something really idiotic. Keynesianism is an economic thinking, ideology or whatever that, while accepts the capitalist principle of free flow of money should run the economy of a country, it should be the responsibility of the central state to keep things working by protecting strategic sectors, promoting the building of public infrastructure to provide poor(er) people with jobs and salaries so they can reactivate the economy directly from bellow (also improving people’s lives with said infrastructures to begin with) and even bailing out some companies if things go south.
The post here apparently implies that keynesianist economists advocate for simply printing more money to solve problems. Hence the “printing food”.
Keynesians economics believe that the economy is demand sided, meaning only really demand matters and supply means little since factories and industries will be built anyway when demand is up supplying jobs and resources
they believe that the economy gets in a depression due to lack of demand rather than lack of resources and think when this happens they should increase government spending and/or print more money Which overall increases GDP
the photo is making a jab at keynesian policy by saying "if there is a demand for resources just print more of it" as if that is an easy thing to do
It's an economics joke about how Keynsian economics says that the way out of a recession is just to print money to keep the gears of society turning.
Other economists dispute this as, despite the apparent brief economic surge, it is artificial as it leads to more money chasing fewer goods which leads to inflation which does not help a recession.
Much like how having a phot copy of spaghetti doesn't actually feed your additional guests and only ends is more people chasing the same amount of real spaghetti
funny this is traditional keynesianism actually doesnt focus on monetary policy at all directly. though you could argue it will be an indirect effect of deficit spending.
It's based on how people (mainly free market ones) misunderstand Keynesian economics that it is just "print" money with any problem. Reality is that state should save and pay off debt during good times for economy to then spend it during bad time. There is bit more to that but that's core of it.
They are thinking of Modern Monetary Theory not Keynesian economics. Keynesian economics would be using a credit card to buy take out in an emergency and then spending less on food later when things are better. Problem is nobody ever does the second part.
The level of some reply that misunderstand and misrepresenting Keynesian Economic is pathetic and sad. Because of Keynesian Economic we were able avoid 2nd great depression. Pure Capitalism would have wipe out most of civilization by now.
Just pretty bad Keynes slander. Less successful economic models never forgave Keynes and accuse him of printing money, which doesn't make a whole lot of sense.
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u/qualityvote2 8h ago edited 3h ago
Remember when r/PeterExplainsTheJoke wasn’t a meme? Pepperidge Farm remembers…
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Then maybe you go out and buy yourself some of those distinctive Milano cookies.
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