Rakesh Bhandari wrote:
> I think govts have in fact already found that running deficits the
> size that would be needed to achieve full employment would only yield
> retrenchment in private investment;
Rakesh, I am not sure how you support the above. Right wingers often
say the same. Does Mattick/Grossman propose that idea?
Now, we have to make a distinction between deficit spending at the
trough and near full
employment. near the trough, it will encourage investment -- less so
the further you come to full employment.
? govts thus find that limiting
> deficits and containing the run up in debt are important to
> maintaining private investment--that is, fiscal prudence gives
> confidence that taxes and interest rates will remain under control
> over the projected future and the state will thus not bite into
> profits the prospects for which are not strong.
This above statement sounds similar to Robert Barro. With low capacity
utilization, companies don't care much about fixcal prudence.
> The state thus finds itself unable to do much even as the private
> economy has been unable to generate full employment and plunges
> itself into downturns. This has already made many people expendable;
> that is in part why we continue to be haunted by bourgeois dysgenic
> fears about the black so called underclass and so called illegal
> aliens.
>
> The limits of the mixed economy have in fact already been reached,
> including now in Japan.
I don't think that Japan qualifies as a mixed economy, but I cannot
speak with certainty. Japan is, in my mind, relatively unique.
> I do emphatically agree on the importance of the theory of fictitious
> capital as you are developing it here. In particular, I agree that
> the way out of recessions ultimately depends upon the slaughter of
> capital values, not higher prices and strong consumption in the first
> instance.
I believe that the slaughtering of captial values gives capital a lot
more room to maneuver than a Keynesian solution -- which I regard as a
temporary fix -- although I am not convinced that the ultimate problem
is deficit financing.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
