Monthly Archives: June 2017

Keynesian Economic

This is one of my favorite subjects because very few politicians follow the requirements of it.  The idea behind Keynesian Economics is that of one buying on credit.  In the past, you were expected to balance your budget at the end of every fiscal year, whether that year ended on June 30th. or December 31st.  You were not supposed to carry the balance onto the next year.  You were supposed to balance your budget.  Keynes changed all of that.

The British were borrowing heavily in World War II in order to pay for the damaging war.  They tried every year to balance their budget until Economist John Maynard Keynes came up with a brilliant “out.”  What he proposed was a credit line which could last the entire war.  He said that Britain should borrow the money it needed to continue the war until it was won.  He said, “We have shown that, quite apart from war increases in rates of wages, the earnings of the country as a whole should increase by as much as 825 million pounds merely as a result in output and employment.” (Page 20; “How to Pay for the War.”)

“By the end of January 1940, wholesale prices had risen by 27%, the cost of living (seasonally corrected) by 10%, and wages by perhaps 5%; which means that the aggregates I am using should be increased by nearly 10% to conform to the wge and price levels current at that date.)”  The question became how to align those different areas and pay for the war while not upsetting the economy.  His solution was to float the deficit.  He questioned whether the “working class need to be asked to make any sacrifice.  Admittedly,” he said, “they will work harder.”  The trick was to keep the working class working, which meant that they had to get paid, and there was not a tax to ensure their payment.  So, Keynes said, you would pay the average worker with money you had not gathered yet.  You would have to pay them on credit.

Interestingly enough, he said that “If we drift without a comprehensive plan, not this but shop-shortages will result.  And inflation, as we shall see, will be to the clear advantage of the richer class and result in this class bearing not more, but less than their fair share.” (ibid.)  This would result in a class war.  So Keynes was basically saying that, in order to not have a class war, the working class would have to somehow be paid.  And the way to do this was to pay some war expenses on credit.

He said that the national income would be distributed between different income groups which he admitted, was a matter of “first importance.” (ibid.)  So we had countries buying on credit for the first time.

Why was that important?  Because this was a new idea, flying in the face of current reason, it did not take hold immediately.  It took awhile.  It also took the approval of the United States of America, which was floating most of the loans incurred by England and had the most to lose.  Fortunately, President Franklin Roosevelt saw the beauty of the plan.  He even used it to float loans to diminish the effect of the Great Depression.  So it was instituted to the point that, today, we cannot balance the budget if we try to do it.  That is why we are trillions of dollars in debt.  And that is also one of the possible reasons that no administration has been willing to try to balance the budget.

We keep having to raise our “debt ceiling,”  and seldomly does either side of the aisle make much of a ruckus about the debt.  We just continue to raise the “debt ceiling.”  I believe that it is time to pay off some of that debt.  Keynes never said that this was supposed to supplant the idea of a balanced budget.  That could be culled from the  lack of effort to pass laws that could balance the budget.

Keynes said of the burgeoning debt, that “taxation on this scale would involve such wide-spread breaches of existing contracts and commitments that the taxable income themselves would be largely reduced.” (ibid.)  In other words, it would be necessary to offset the debt by paying against it.  That is something that we in the current United States do not seem to be willing to do.  It does not matter which income-level we reported in or at, payment is a problem.   When Bill Clinton was President, I heard his Vice President say that we did not have to worry about Social Security because it would not become collectible until 2037.  I raised my hand, and explained that my young daughter, who was sitting with me would be one of those most affected by the carelessness of the current administration.  I joined the budget cutting group called the “Concord Coalition.”   I have been a member ever-since.

Trump seems as unwilling to balance the budget as Obama was, and that is a problem.  As Keynes said, the deficit has to be trimmed by payment in good times.  We cannot just continue to let it grow as a deficit.  There has to be an effort to tame it.  No more “Debt Ceilings.”  We are opening ourselves to a lack of respect for the United States of America and that is not a good thing.  We cannot allow the Chinese to be the lienholder on our debt.  We should, I believe, pay against the Chinese liens.  We are no longer in the days of Keynes.  We have to pay our debts.  And we have to discontinue trying to augment our economy by floating loans.  As Keynes said, the rich are the only ones who benefit by being in debt.  The rest of us have to eat it.  So let us discontinue that practice and pay on our debt.  It is the only logical thing to do.  Whether it is because of Trump or Obama, does not matter.  It has to be paid.

 

An Opinion on the State of Lowell’s Schools

I have been substituting for a few weeks now and have visited and worked on classes in a number of schools.  This week I got the chance to see the insides of a new school and the oldest currently in use.  This week  I had the chance to visit the Moody Elementary and Bailey Elementary.  Both schools have an incredibly dedicated staff and administration.  I worry about the Moody Elementary because it is older and I do not want anything dire to happen to the last of the “jewels” constructed in the 1880’s.  I also want to protect the Washington Elementary in the Highlands.

The Moody staff is dedicated to their school.  They hold teacher’s meetings when a crisis needs to be averted.  They use the most professional and timely curriculum everyday.  The kids are loved, as they are at the Bailey.  The spotlight in the school system is shining on the students, the children.  The Moody knows the architectural history of their school, and they are very proud of it.  The old third floor is used for gym and events.  They have a real realization of the history of their school.  The Moody has a solid history.  When it was in its prime, it housed the best window lighting system in the city.  That is why  the school has such large windows.  They were built around the idea that the sun would hit certain rooms at different intervals.  The large windows predate electricity.  They were placed to maximize exposure to the sun in the winter months.  You could not use the school during winter after about 3:30PM.  There wasn’t enough light.  So the architect built a massive window system to allow light into the school.  It works.  I noted it when I was with the Kindergarten at the school.

The Moody School was one of a batch of “jewels” in the early years of the school system.  Other schools in that category included the Pawtucketville Memorial, which was dedicated to those who died in the Civil War, the Bartlett School, the Butler School, the Lincoln School, the Green School in downtown, and others built in this time period.  Principals in these new schools were expected to take over the Superintendent’s duties and become superintendents of their own.  The pay for a principal of a new school was $1,800.00 per year.  The Pond Street School had a female principal, her salary was a small $600.00 per year.  One room schools paid even less.  There were over seventy one room schoolhouses at one point.  Many were turned into homes.  Existing structures include two in the Acre.  Those two still exist and I will be taking pictures of them for a later article.

The other school I was in this week was the incredible Bailey School in the Highlands.  I went up two one way streets in the wrong direction looking for the teacher’s parking, but other than that there were no problems.  They chose not to give me tickets, which I deserved.  I had a Fourth Grade class, and the students were great, with maybe one exception.  We did Math, English, Cursive Writing, and Social Studies.  We also watched a great school play but I never got the name of the play from the other teachers so you will have to go see it this week.  You can get the name.

There was alot of education going on in the school last week.  Students were busy learning cursive, which is a major hurdle for me, I wanted them to learn cursive.  Otherwise, how would they know how to write their own signature.  The Math was concentrated on Multiplication, the English on free writing practice, the Science seemed to be on sediments.  The Social Studies was on learning the location of the states of the Union.  That is something we all need to reteach ourselves, especially when the Electoral College defines an election like it did this year.  I mean, I have a good idea of where every state is located, but it is interesting to learn it again.  I want to thank the students for helping me get the work out to them so they could work on it.  They did a marvelous job.

On Friday, we had Field Day.  That was a lot of fun.  They played all sorts of enjoyable games and had a popsicle afterwards.  Then it was back to Math and Social Studies.  I told them a story that was a legend in the 1800’s.  Two Native Americans from opposite sides of the Merrimack River met and developed a deep love.  They planned to escape the restrictions placed on them by their Pentucket and Pawtucket nations and form a new place to live further down the river.  They learned that the Pawtucket’s had told John Smith, the Puritan minister, that they named the river  the Merrimack, or “Strong Place.”  Some of the students made an arm and said that the reason it was called “The Strong Place,”  was because it looked like an extended arm and that signaled strength.  Two students tried  to wrestle with their arms and see who was most like the Merrimack.  I do not know who won, but only one opportunity existed for that demonstration of muscular finesse.

So, I had a very good week with some outstanding students.  One boy noticed that not every button on my sport coat was buttoned.  He asked me if I would button all three buttons.  I agreed that it was a good idea so I buttoned all of them.  Later, I let them back out, but he was satisfied.

Some great learning is happening in Lowell.  The Department of Education at the state level is proctoring new ideas into every school often.  I think the state could take it easy, because the schools seem to be policing themselves, and that is a good thing.  But the state seems to be determined to being in the middle of the curricular nuances of each school system.  Maybe they are just protecting their financial input into the school systems.  Or perhaps they just like to have something to do.  Time will tell.

So that was my week this past five days.  I hope your work was as rewarding.