“And why compare GDP numbers from the boom to the bust?”
GDP numbers have a lot of problems, especially when used as indicators of economic health, or of productivity of goods and services versus investment vehicles, but they are a decent measure of overall economic productivity. I don’t really understand why you think government spending shouldn’t count in GDP. It employs people and results in actual goods and services, which seems to be what we want GDP to measure.

“The boom was an artificial economy anyway, so everything was distorted.”
It was one of the least regulated economies since before the Roman empire, so if you call it artificial, then you’re calling everything artificial. Check out this timeline for the 1920s: http://www.huppi.com/kangaroo/Timeline.htm It demonstrates pretty clearly that deregulation was rampant and played a big role in creating the bubble.

“If you lost your job, wouldn’t you have to cut your expenses and rethink your spending strategies? Why does this thinking change when we talk about countries? Logically it makes no sense to me…”
The illogical part is where you assume that people and countries are equivalent.

“the other thing is that the economy is a very, very, very complex creature.”
And that is why it drives me nuts when people tell me that every problem with this very, very, very complex creature can be fixed through deregulation.

“I suppose you think a broken window is a good thing because it stimulates the economy.”
You suppose wrong. The fact that disaster relief feeds GDP as much a true productivity is one of my beefs with GDP.

“But on the other hand, if that window owner didn’t have to replace the window they could have spent the money on something else.”
I suggest reading about the velocity of money. This idea that if money isn’t spent on one thing, it will be spent on something else has popped up a couple times in our conversations, and it doesn’t make sense once you know a thing or two about velocity of money and how it affects economic activity.

“But where to draw the line? Eventually it will lead to a tyrannical government. Yes, fraud will happen, and so will murder and all kinds of other bad things, but that’s life… we’re humans, we are not perfect, and no matter what you think, a group of humans getting together making decisions aren’t perfect either, so let’s leave the decision making to individuals. At least they will have no one to blame but themselves.”
If I may summarize your argument: murder and fraud are fine when blamed on another individual, but awful when the government does them, and any small mistakes by the government automatically lead to murder and fraud. I have difficulty buying either part of that argument. I would rather continue the excellent record of democratic governments successfully preventing murders and frauds.

On the bright side, at least we’ve established that unregulated markets do not prevent murder and fraud.

“if you’re wrong and spending more money on everything doesn’t actually save us from ourselves”
I’ve got a good track record so far. Falling crime rates, improving health outcomes, higher levels of education, wider rights and freedoms. You’d almost think we were doing something right.

“I will be very angry that my money was taken from me!”
But you are not happy that your money was given to you by the investments in education, infrastructure, research and prosperity that our society has made.

“In a republic, with guns as self protection, the wolves will have to go find their own food.” This so clearly explains why banditry was not a problem in the Wild West… oh wait. Please, at least consider whether history has any relevant examples before you make these statements.

“We don’t want majority (aka mob) rules… we want freedom!”
Majority and mob are not at all the same thing. Mob rule is a lack of regulation. Majority rule comes with many checks and balances.

“we want freedom! And that means, freedom from being told what to do by the majority.”
Well, you’re free then. You can walk away from accepting the constraints of democratic government any time you like. You’ll just need to give up the benefits as well.

“And sure I could leave Canada, and maybe I will if we continue down this road to serfdom.”
No, you won’t. Sorry, but you won’t. Because your life here is way better than anything else you could get. It’s easy to say what’s bad, but creating a real, working alternative…

At any rate, we’ve now established that you’re not being forced into anything. You have your freedom. You choose not to exercise it. But we’re morally sound, so now we can discuss whether unregulated markets are a good idea without this ridiculous claim that anything else is amoral.

“Yeah, well, because we allow governments to control so much of everything, the rich figured out the best way to get what they want is to influence the government.”
I don’t follow. We agree that the government is deregulating trade, we agree that the result is a negative impact on individual prosperity, and we agree that your theory is that deregulated trade should increase individual prosperity. That makes your theory the opposite of the evidence, and it doesn’t matter whether the rich have influenced the government or not, they are doing what you suggest and we’re getting the opposite of what you said.

BTW, the rich also influence the think tanks that put out the theories you subscribe to.

“The best way to get back to fair living is to reduce the power and size of the government. Simply increasing the rules and regulations will not solve this problem.”
Where does the power go? Who will wield it? Will it magically become evenly spread in the population? Or will the usual reality of power being taken by those who can snatch it occur? And then how will we have fair living when there is power without transparency or accountability?

“Cheaper products for everyone definitely helps society…”
Nope, it’s actually really bad for the environment.

“if it’s what we want to spend money on, then it’s what we want in our lives”
No, it’s what advertising tricks people into thinking they want. People, contrary to neo-liberal economic theory, are not rational nor do they possess perfect information.

“Individually we all have rights, but then you seem to think that groups of people (aka the majority) have more rights.”
I see why you think that’s the point I was making, but it’s not. The point I was making is that *everyone* has their choice of system of government. If they choose to stay in Canada, then they are contractually obligated to be part of a democratic system. But if they don’t like it, no one forces them to remain in Canada. Every Canadian has the right to choose whether they want to live under the Canadian system of government. So don’t give me this tyranny of the majority tripe. It’s a choice that you make every day you decide to stay here. No one forces you.

“If the government was so good at providing economies of scale, why is it that almost everything they provide for us costs more and has lower quality than free market alternatives?”
First, it doesn’t. For instance, Canadian health care covers more of our population at a lower cost than American health care. The idea behind public-private partnerships was that public services should have similar costs to what they would if provided privately. In some cases the private sector has bowed out because they cannot provide the same efficiency. In other cases, we’ve discovered that the private sector can make money, but the level of quality is lowered. In other cases, PPPs are working well. But it’s certainly not the case that PPPs demonstrate that publicly provided services are higher cost and lower quality than equivalent private services.

Oh, and now she’s comparing GDP numbers, and you know my feelings on GDP! And why compare GDP numbers from the boom to the bust? The boom was an artificial economy anyway, so everything was distorted. The recession is when the world rebalances the imbalances that occurred during the boom. I don’t understand why Keynesians have such a problem with people increasing their savings during a recession. If you lost your job, wouldn’t you have to cut your expenses and rethink your spending strategies? Why does this thinking change when we talk about countries? Logically it makes no sense to me…

Yaacov, the other thing is that the economy is a very, very, very complex creature. Every transaction plays a role, and for every transaction that does occur, there are countless other transactions that could have occurred if it didn’t. I suppose you think a broken window is a good thing because it stimulates the economy. But logically this makes no sense, because something was destroyed. Sure the window owner now has to spend money to repair it, and the window maker now has more money to spend, etc, etc. But on the other hand, if that window owner didn’t have to replace the window they could have spent the money on something else. Destroying something is not productive for society. If that were the case we could employ half of society digging ditches, and the other half filling them in. Sometimes as economists we need to think about things logically and stop looking at the numbers.

“Regulation can’t protect people from everything, and shouldn’t try to, but it does have a useful role that decreases the damage done.”
But where to draw the line? Eventually it will lead to a tyrannical government. Yes, fraud will happen, and so will murder and all kinds of other bad things, but that’s life… we’re humans, we are not perfect, and no matter what you think, a group of humans getting together making decisions aren’t perfect either, so let’s leave the decision making to individuals. At least they will have no one to blame but themselves.

And sure I could leave Canada, and maybe I will if we continue down this road to serfdom. But I’m trying to debate these issues and help people recognize that there is no safe level of socialism. In your world there will always be fraud and dangerous things to protect us from. And over time, we simply cannot afford it. I

“Well, they’re not doing a very good job of it so far. As we’ve reduced regulation, real wage increases slowed and eventually stopped. We’ve had flat real wages for over thirty years now. Income inequality is sky-rocketing both in our country and in the world.”
Yeah, well, because we allow governments to control so much of everything, the rich figured out the best way to get what they want is to influence the government. The best way to get back to fair living is to reduce the power and size of the government. Simply increasing the rules and regulations will not solve this problem. We’ve been off the gold standard for the last 40 years, which has allowed governments to spend insane amounts of money… it’s been one big bubble… watch out when it pops… just look at all the governments around the world having issues sellings bonds.

“First of all, I don’t think that cheaper products for everyone is a major benefit to our society”
What? Cheaper products for everyone definitely helps society… if it’s what we want to spend money on, then it’s what we want in our lives, and if it is cheaper, then we have more money to spend on other things. When Walmart is able to provide things cheaper (thanks to their economies of scale) than previously possible, the poor benefit and have more money to spend on other things. Their standard of living has just been raised.

“You can’t very well argue that freedom to make economic choices is saintly but freedom to choose a form of government is not allowed.”
Yes, I think I can argue that. Individually we all have rights, but then you seem to think that groups of people (aka the majority) have more rights. Why is that? Just because people share a commonality doesn’t mean they suddenly have more rights than the people who don’t share this commonality.

If the government was so good at providing economies of scale, why is it that almost everything they provide for us costs more and has lower quality than free market alternatives?