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Steer Market Vs Hayek

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Steer Market Vs Hayek
The Hayek and Keynesian economic differences can be summed up as free market versus a steer market. “Hayek viewed the market as capable to correct itself, when facing shocks, by taking advantage of competitive forces, and regarded government and central bankers' policy efforts to restore growth as causes of more instability.” (Terzi) In a free market, savings are encouraged along with market investment. “Keynes viewed the economic (macro) system as vulnerable to periodic declines in demand, and regarded traditional (micro) adjustment mechanisms (such as wage and price declines) as ineffective to restore growth and prosperity.” (Terzi) Whereas the steer market relies on the “boom and bust” cycle. This includes: boost aggregate, stimulus packages, and bail outs to corporations and businesses. The United States has been favoring the Keynesian system in the most recent decades; however, it was founded on capitalism and Hayek's model of investing and production. In the most recent decade, we experienced the housing bubble of 2008. Interest rates rose after the boom and loans were being given out loosely causing inflation. This is typical of the “boom and bust” cycle. Where spending is encouraged, inflation then …show more content…
More borrowing and spending coupled with fluctuating interest rates and inflation. A big discussion in the presidential debate has been tax reform. Both candidates have different views on who, and what percentage of who gets taxed. The Republican side is conservative leaning and has more emphasis on the Hayek philosophy of the free market mixed with market and capital investments. The Democratic side is liberal leaning favors the ideology of the Keynesian steer market cycle. A balloon of inflate and deflate. Too much borrowing money without having the resources to back up our debt. Money is being printed at the Federal Reserve at an ever increasing rate. We are currently twenty trillion in debt and
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