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Sunday, June 17, 2012

Re: [mukto-mona] Keyensian prescriptions and National debt

"It takes two hands to clap." There are savvy borrowers and then, there are idiots, who will borrow money without having the capacity of paying back. I think the consumers should be able to correct the problems if they really want. People can choose smaller banks and credit unions rather than going for the bigger ones. If bigger ones want to gamble with depositors' money, lets cut them loose from the FDIC insurance guarantee. 

I think, this discussion has run its course. I am not sure how got here? Little focus might be a good medicine.
"All great truths begin as blasphemies." GBS

From: Kamal Das <>
Sent: Sunday, June 17, 2012 3:03 AM
Subject: Re: [mukto-mona] Keyensian prescriptions and National debt

No matter what political denomination an administration belongs to, the big banks would push the bait of loan down your throat to make a profit.  My observation is that Mr. Keynes was the Guru of it all.

On Sun, Jun 17, 2012 at 8:13 AM, Jiten Roy <> wrote:

I do not believe we need to be an economist to understand the national debt. Debt does not matter when GDP is growing and debt is not too big. Unfortunately, debt is so big now that we are paying $454 billion/year just for interest on the debt. How many schools could be built with that amount? How many teachers could be hired with that money? Debt has been 100% of GDP for the first time. At this point - lenders is nervous, and country's economic credibility is diminished as a result. It will also affect credit rating, which has already been lowered recently for the first time, meaning interest rate on the debt is higher now. I do not understand how people can say that debt does not matter.
Let's look at what happened during Bush and Obama periods.
Bush raised debt from 5.9 T to 10.7 T in 8 years, meaning he increased debt by 4.8 T in 8 years. Now let's look at Obama; he raised debt from 12.3 T to 15.1 T in 2 years, meaning 2.8 T in 2 years, and requesting for more. This is all we need to know to understand the debt situation in the USA.
Jiten Roy
--- On Sat, 6/16/12, subimal chakrabarty <> wrote:

From: subimal chakrabarty <>
Subject: Re: [mukto-mona] Keyensian prescriptions and National debt
To: "" <>
Date: Saturday, June 16, 2012, 7:27 PM

Do I have any political view? I don't think so. I am neither a Democrat, nor a Republican. I am neither in AL nor in BNP. In a true sense, I try to be a Mukto-mona. You emphasized on the phrase "current administration". I simply wanted to show that over the last 35 years every president has contributed to the increase in per capita national debt. Coincidentally the highest contributions came from Reagan (168%) followed by two other Republican presidents. Now, as I can see from your statistics, we have reached a national debt which is almost 100% of the GDP during Obama. This 100% has accumulated over the last 35 years.   Any way, many believe that national debt is not as bad as one may think, although we hear a lot of horror stories like Japan's potential to buy California, and so on. I am too little to make a comment on that. 

From: Jiten Roy <>
Sent: Saturday, June 16, 2012 4:36 PM
Subject: Re: [mukto-mona] Keyensian prescriptions
You have shown data to conform to your political view. Let me show mine.
President                                             Debt as % of GDP
Carter       ('77 - '80)                                        33.3
Regan      ('81 - '88)                                         52.6 Sr. Bush  ('89 - '92)  65.9
Clinton     ('93 - '00)                                         57.7
Jr. Bush   ('01 - '08)                                         74.1
Obama     ('09 - '11)                                         99.7
Debt will be >100% of GDP under Obama watch. Go ahead elect him in the second term, and join Greece economic model.
Jiten Roy
--- On Sat, 6/16/12, subimal chakrabarty <> wrote:

From: subimal chakrabarty <>
Subject: [mukto-mona] Keyensian prescriptions
To: "" <>
Date: Saturday, June 16, 2012, 4:45 PM

Economic policy issues are a vast area and obviously are beyond my comprehension. It will help if we can restrict the discussion to a specific issue which in this case is about Keynesian prescriptions. In simple terms, Keynesian prescriptions for positively influencing aggreagte deman may include increase in government purchase (to create jobs, for example), reduction in taxes, lowering of real interest rate, and increase in money supply (for example, by buying bonds). Now it is a political decision whether money has to be borrowed or printed or interest rate has to be lowered or not to make up for the reduction in tax for example. Obviously, it is a complex issue. 
Let me quote some data below. This should address Dr. Jiten Roy's wonderment also.
President    % change in per capita national debt                                        
Carter                                            36.6
Reagan                                        168.0
Bush Sr.                                        49.2 
Clinton                                          22.5
Bush Jr.                                        75.2
Obama                                          37.6
From: Kamal Das <>
Sent: Saturday, June 16, 2012 2:25 AM
Subject: Re: [mukto-mona] The Stockholm Syndrome -- for Jiten Roy
On a 5% per annum interest rate !5 trillion dollar loan incurs .75 trillion dollars per year.  That is at least 25% of the U.S. annual budget. For a country like Jamaica loan servicing eats up more than fifty percent of the budget.  Keynes and his followers have caused this mess to put the world economy in the present situation.  The Bank officers get many times more bonus than their salaries.  Even the banks of international reputation have shrunk in assets.  One should read a few pages on this 'dismal science' as Carlyle called it before making comments on it.
On Sat, Jun 16, 2012 at 1:53 AM, subimal chakrabarty <> wrote:
1. No doubt Keynes is not "dhonwontori". Economic theories are still evolving. There is now some thing called neo-Keynesian-ism. There are other schools of thought too. Keynesian-ism as I understand it is not about spending more than what I (a nation) have (has). When public has no money and banking system fails, the government undertakes projects to provide jobs for them opening avenues for them to earn and thereby creating demand. Hoover Dam is a vivid example. 
2. You are right. Any war time economy will do the same thing. Great Britain was definitely not an exception. Stalin's USSR was a different case though.
From: Kamal Das <>
Sent: Thursday, June 14, 2012 3:55 AM
Subject: Re: [mukto-mona] The Stockholm Syndrome -- for Jiten Roy
"Keynesian model was a great help in getting out of the Great depression."  J. M. Keynes, widely considered as the father of modern macroeconomics, is also known as the father of all contemporary economic woes.  No family or country can afford to spend more money than it possesses.  It might have solved the great depression temporarily, but it has ruined the worth of money and caused stagflation in the long run.  People will discard Keynes like the Indians did to Charvac in the ancient times.  Affluence is not achieved by borrowing money to drink 'clarified butter'.

"Hitler and Stalin produced far more guns than butter needed for the citizens."  Just another piece of post war propaganda by the U. S. led group of countries.  According to Galbraith, England spent more money than Germany did both in amount and percent of national budget on war efforts.  Moreover without Stalin enhanced the defeat of Germany.  Without the requisite number of guns, could they achieve it by preaching the theories of Gandhi?
On Wed, Jun 13, 2012 at 8:06 PM, subimal chakrabarty <> wrote:
1. Prof. Das is not saying any thing new. Now I have highlighted the broad reasons mentioned in my last message.
2. There is a concept called "4 Ps" (Product, Price, Place, and Promotion) in modern marketing theory. Here "Place" stands for "distribution". These 4 Ps need to be optimized and in that sense all these should be integral parts of a good marketing plan. But in the hands of a stupid or a misguided and dishonest businessman, it may not be so. Instead of placing the output in the hands of the ultimate consumer, temporarily he may go for hoarding. And that is exactly what happened in 1943. Even there is a theory that in 1943 Bengal had enough food to feed every mouth, but distribution (to the consumers) efforts were insufficient due to collusion between vested interest groups.
3. An economy can produce all butter or all guns (using the examples used by Paul Samuelson in explaining the concept of "production possibilities frontier" of an economy) or an optimum mix of these two. Hitler and Stalin produced far more guns than butter needed for the citizens. But neither of the two could be called "development". And it is noteworthy that neither of the two regimes was democratic. Sen cannot be said to be flawed as it is only proper democracy that can ensure proper development. One does not need to be an economist or a student of economics to understand it.
4. We should not overvalue or undervalue an economist. Keynesian model was a great help in getting out of the Great depression.
5. Why only the economists should be on a committee? All sorts of technocrats should be on it. And that is also not enough. They must be guided by a vision. And the visionary does not have to be an economist or an engineer.         
From: Kamal Das <>
To: subimal chakrabarty <>
Sent: Tuesday, June 12, 2012 7:35 PM
Subject: Re: [mukto-mona] The Stockholm Syndrome -- for Jiten Roy
The Bengal famine 1943 occurred because the British rulers wanted it.  Transport facilities were not 'engaged in war efforts' as Chakrabarty observes, boats were banned so that 'Azad Hind Fauz' can't infiltrate into Bengal.  Suhrawardy was then food minister.  He awarded the food dealership illegally to Ispahani(and Saha) who raised the food grain price forty folds overnight.  Suhrawardy was made the Prime Minister of Bengal as a reward.  Ispahani became very rich to finance the Calcutta riots, partition of Bengal and other mishaps through the politics of Muslim League. Production and marketing are inseparable.  The businessmen enhance distribution of food or any item for that matter in their own interest unless impeded by the Govt.  Professor Amartya Sen's work on Bengal and Kerala is based on the assumption that the prerequisite of development in any land is democracy.  His theory is inherently flawed and advocates the U.S. Govt. policy in the third world.  Economists have become the high priests of the modern society.  They are the creators of all the woes and not the solvers.  This was understood by Jimmy Carter over three decades ago.  If a committee of economists have five members, they usually come up with five opinions(six if one is a Harvard graduate) on any issue.
On Tue, Jun 12, 2012 at 10:59 PM, subimal chakrabarty <> wrote:
Farida and Shah are right. Production is not enough. Distribution is also vital. During 1943 famine in Bengal (better known as Panchachher Monwontor) about 15% of Bengalis perished due to shortage of food and related causes. In addition to less production, unethical profit motives, and bad politics, distribution played a major role in this great human tragedy. Timely and proper steps were not taken to supply food from other parts of India. WWII was at it's peak and transportation facilities were heavily engaged in war efforts. Amartya Sen has shed light on it in his theoretical works.
The question is what poverty and what kind? The poverty comes in different forms and they are no less worse than one another. Certain form can and should be addressed as Farida pointed out. If foods are not being stored in critical and secured places and not distributed to the rights places in this era of supply chain revolution, that should be considered as criminal act. I do not think she meant to say that she is after total eradication of poverty. Even one meal per day would be a great achievement for a starving family.
The definition of poverty is also an arbitrary one. An Amazonian tribe member might be very happy to have some bugs, insects and yucca for his/her lunch and consider himself/herself far happier and content than the queen of England. A bamboo hut what he/she needs to sustain his/her life. Is he/she poverty stricken? Hell no! He/she is just better equipped than many of us, who have lost connection with the true reality.
OK, the point is poverty is man made. You fight for your existence, you are not a poverty stricken person! A Darwinian man/woman should be able to survive if he/she combines both his/ her animal and human instincts and applies them intelligently. Waiting to be served would be a bad idea and lead to dismal consequences. That may be the part of the problem?

"All great truths begin as blasphemies." GBS
From: Jiten Roy <>
Sent: Monday, June 11, 2012 8:15 PM
Subject: Re: [mukto-mona] The Stockholm Syndrome -- for Jiten Roy
Dr. Das is right - there is no economic system in the world (Socialism, Capitalism, etc.) that can eradicate poverty. What we see in the name of eradicating poverty – is just politics with poverty. For example, current American President is fighting for the poor and middle class in public, and then hosting a dinner party for $35,000 a plate. That's what is going on in this world. You want to get out of poverty; you have to do it yourself. That's the only system that works.
Ms. Majid thinks so much about the poor and the downtrodden in India; I can't help but admire her empathy. After all, India may have the largest segment of the poor in the world. I agree, India should do much more to alleviate poverty in India. It just feels odd that she is worried about Indian poor and downtrodden, while we have so many in our own backyard ( e.g., in the slums of Tongi, Sadarghat, Narayongonj, etc.). 
Unfortunately, her socialist ideology will not provide solution for the world hunger; it has failed everywhere, even in the birth places of socialism. Capitalism has failed also to eradicate poverty. So, I am afraid - there is no magic bullet, and she may have to bear this lingering pain forever.
She feels for workers' rights in the USA. She did not clarify what those rights are. As far as I know - there are laws to deal with the discriminatory practices (sexual, communal, racial, etc.) in the workplace. Workers also have the right to quit the job. In my view, that's the most important right a worker can have. There are countries in the world, where workers are bonded to the employers. Those are slave workers. America also has contract provision also, but it works usually more in favor of the workers. What else she could be complaining about workers' rights in USA. Maybe she was talking about the right to organize. She may be suffering from the defeat in Wisconsin. Those dumb Americans in Wisconsin rejected her socialist ideology. Too bad!
Jiten Roy--- On Sun, 6/10/12, Kamal Das <> wrote:
From: Kamal Das <> Subject: Re: [mukto-mona] The Stockholm Syndrome -- for Jiten RoyTo: mukto-mona@yahoogroups.comDate: Sunday, June 10, 2012, 10:45 PM
Most of these 'wise' bloggers here write about things they have leastidea on. India has more poor people than all of Africa combined. Canthe 'wise' lady Ms. Majid suggest a way to eliminate poverty fromanywhere? She might give it a try in her backyard, viz., MadisonSquare Garden, where the homeless, jobless and starving sleep incardboard cartoons.There is hardly any difference between unskilled person and a pest ofthe rodent variety. For every dollar spent on charity, only a coupleof dimes end up to the people who need it.You feed a poor on charity, next thing he does is to 'multiply andinherit the earth', but as J. Paul Getty observed, 'not it'sresources'. One sure way of eliminating poor had been to make themsword rattler, or canon fodder. But in today's world, there are notenough wars.


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"I disapprove of what you say, but I will defend to the death your right to say it".
               -Beatrice Hall [pseudonym: S.G. Tallentyre], 190

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