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Ask HN: What is your opinion on The Austrian School of Economics?

5 pointsby leorioabout 5 years ago
Major countries are resorting to printing money to pay for the coronavirus stimulus, I was wondering if this is what needs to be done?<p>Why should broken companies be bailed out?<p>https:&#x2F;&#x2F;wtfhappenedin1971.com&#x2F;<p>&quot;In the long run we are all dead&quot;

2 comments

notahackerabout 5 years ago
Bryan Caplan&#x27;s &#x27;Why I Am Not An Austrian Economist&#x27; is a pretty definitive take on the weaknesses of the school&#x27;s main arguments (from someone based at the only faculty to seriously focus on Austrian Economics who is broadly sympathetic to the school politically and sceptical of much of mainstream economics). <a href="http:&#x2F;&#x2F;econfaculty.gmu.edu&#x2F;bcaplan&#x2F;whyaust.htm" rel="nofollow">http:&#x2F;&#x2F;econfaculty.gmu.edu&#x2F;bcaplan&#x2F;whyaust.htm</a><p>What happened in 1971 was that the remnant gold standard system embodied in Bretton Woods proved to be entirely inadequate to changing economic circumstances. Despite the Gold Standard&#x27;s almost religious significance to certain economists of Austrian stripes, many of the other economic changes over the last half century were driven far more by abandonment of policies Austrian economists generally hate [large scale public investment projects, collective bargaining] and embrace of policies they love [deregulation, flattening of the tax system]. There&#x27;s a reason that the incomes of the &quot;1%&quot; actually start growing rapidly again in the 1980s and not the 1970s, for example.<p>As for why the current set of broken companies should be bailed out, it&#x27;s quite difficult to argue either ethically that businesses ought to bear the financial responsibility for being ordered to stop trading for health reasons, or in terms of economic substainability that the public will be better off starting everything from scratch if and when anyone feels like starting things like air transport again.
thecupisblueabout 5 years ago
It&#x27;s debt for money&#x27;s sake, to keep the mirage running.<p>There was a multitude of factors here. Do these statistics consider that in 1971, the &quot;adult generation&quot; was way smaller than others, due to world war? And then by the 70&#x27;s a lot of them was in the viet war, as wars came to end their budget tightened, the WW2 bonds were repaid, the money production that had to be turned up got turned down, basically, everything seemed to be going downhill one could say.<p>But, looking at the same time - sudden influx of new workforce by 1980&#x27;s - both due to kids born in the 60&#x27;s being adult now, civil rights finally becoming a thing meant more workers could join the workforce at every level, computers, mobile phones and internet expanded the market to a global one for the companies that could handle it, US companies started exporting production for some parts and there was no huge wars happening after that that would kill off a huge chunk of a working gneration.. nothing could stop the economy blastoff about to happen.<p>RE: COVID stimulus - Just wait for July, when shit really starts to go down. Lack of tourists, unpaid loans, what were freshly bought BnB money factories are turning into black holes of debt, stuff that won&#x27;t be able to reopen, people that won&#x27;t be able to get rehired, tax income noticably low, universities seeing their applicant rates are lowest ever. Printing money is the best way to solve it tbh, because at the end of the day money is dependent on time, so we&#x27;re basically hyperproducing borrowed time, and just like it&#x27;s dependent, it isn&#x27;t real. I assume either EU falls apart and we get 5-10 years of economic chaos or EU helps countries finance universal basic income and it becomes a a new normal. I put more weight on the second one.
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