The point of the comment is that businesses aren't magical, they make mistakes all the time and at times those mistakes are so large they can send the economy into a recession.LogicExplorer wrote: ↑Thu Mar 29, 2018 5:39 pm If a buisness in a free market starts to lose money, that's the signal that it's spending the wrong way (and that it would be better not to spend money at all). The government is usually worse at spending money than the buisnesses are because they often (or even most often) don't get such a signal. Why do you think socialism fails? I think that's an important question.
Keynes isn't a socialist so I'm not sure why you're talking about socialism. Arguing that the government should provide some services and deal with market failures is not the same as advocating for socialism. Unregulated free-markets are problematic on many levels and there is no successful economy that has unregulated free-markets, in fact the countries with the most equity, greatest level of happiness, etc are ones that have more regulations than exist in the US (e.g., Sweden, Finland, etc).
If the government decreased spending during a recession it would make the recession worse. Why would that be the "right thing"? Is it better for more people to be unemployed? For more people to lose their homes? Etc.LogicExplorer wrote: ↑Thu Mar 29, 2018 5:39 pm And maybe the right thing to do during the recessions is to decrease spending. Or do you think there is some evidence that the paradox of the thrift is a real thing?
There is plenty of evidence of the "paradox of thrift" but it hinges are certain economic conditions. The problem is that during a recession increased saving is essential dead-weight, even if people store the savings at banks (if they save in cash, gold, etc it will even be worse) the increased capital won't be spent because businesses, governments, etc are reducing spending and saving as well.