The country cannot, in fact, be run like a business.

[Bob Butler 54]

(09-28-2016, 05:22 PM)Einzige Wrote: Even beyond that, market models are demonstrably incompatible, on an organizational level, with government.

From my point of view, the attitude towards finance and money is and ought to be very very distinct.  To a business, money is the prize to be striven for, and indication on whether one is 'winning' the game or whether one's organization is stable.   To a government at the largest scale, money is a lubricant.  If sufficient people have enough  funds, transactions will take place and the economy is healthy.  If one group of another lacks money, they are to that degree eliminated from the economy, which is thus diminished.

Before Keynes, governments acted much like businesses during an economic downturn.  They scaled down, slowed down, made sure the books were balanced, and waited until things recovered before upscaling again.  Keynes suggested the opposite.  When there is no money floating around, you have to kick things alive by priming the pump.  Thus was born the idea of stimulus, of improving the economy by putting money in the hands of this group or that which could kick things alive by spending the money.

This doesn't answer the balancing questions.  Do the Robber Barons need more money?  If so, supply side stimulus.  Do the People need more money?  If so, demand side stimulus.  Is too much of the budget going to paying off debt instruments used to create the above stimulus, thus crippling the ability of the government to do stuff?  If so, buy down the debt rather than apply stimulus.

Businesses just don't think in such terms, and ought not to be thinking in such terms.  Meanwhile, government financial people shouldn't go in blinded by a political dogma, thinking that one of the above policies is always correct no matter what the current state of the economy.  The question is not which of the three above principles are correct, but how one should ideally balance the three given the current state of the economy.

I recently started reading Thomas Piketty's Capitol.  It was named for Marx's work, and attempts the once every 50 years reevaluation of how economics works.  It is a lot more complex than my simple summary above, not in principle, but in how many types of capitol and labor there are.  Land is different from factories which is different from services.  Farmers are different from factory workers who are different from service providers, who are different from investors, who are different from innovators...  etc.  There are not just two buckets to be balanced, the supply bucket and the demand bucket.  There are lots and lots of buckets.  

Piketty is interpreting hundreds of years of tax records attempting to figure out the importance and proper worth of each of the above.  Managing the economy requires all of the above groups getting a return on their efforts.  The data is available to understand what it takes.  The computers are available to build models and balance things out properly.  But, no, main stream economics, their political masters, and their financial sponsors, are more interested in self justification and self interest than a healthy economy.