Keynesian View of Economics
What is the Keynesian view of economics? It is a disaster, is what it is. It is really not at all difficult for any thinking person to understand why Keynesian economics doesn't work. So, why do so many people so foolishly believe in it? We have to delve deeper into this matter to understand this crisis in brain power.
John Maynard Keynes was an overbearingly arrogant man who was part of the Bloomsbury Group--the group that led the British pacifist movement which largely led to World War II by placating the Nazis whenever they did anything wrong (until the War). He was delusionally in love with the government, and felt that it was the embodiment of a higher moral authority and that it had the power to centrally plan billions of private daily activities in a clean, efficient, rational, noble way. Keynes was the man who put forth the irrational idea of government "stimulus" of the economy--which is precisely why Emperor Dumbo uses this terminology.
Today's Progressive Democrats are driven by their fetish with Keynesian view of economics--so, understanding their politics means Keynes' ideas need to be analyzed. No objective analysis of his ideas or what they have done in practice comes out at all good for those views or the mad Libs. This means these ideas are bad for the health of our nation. But, since Keynesian economics places government at the core of everything, those in power (who are not authentic Republicans) really don't care.
Why Keynesian Economics Doesn't Work
Every inch and ounce of theory and practical, historical data regarding the Keynesian view of economics proves the following points.
- If the government puts money into the economy, it absolutely has to have taken it out of the economy. If the government has taken money out of the economy, it has harmed the economy, for it has removed money from the productive part of the economy, undermining the ability of the private sector to create new productive jobs and raise wages for existing jobs. This is expressed in a favorite economic conundrum of the government hiring people to dig a trench from New York City down to Miami, Florida using teaspoons.
- Harvard Professor Greg Mankiw has calculated that under the Obama/Democrat "stimulus plan", each and every new job (if they even are created in the first place) will cost $280,000. Most of the jobs that would be created certainly would not be worth salaries even close to $280,000 to employers--and the people who get those jobs will not be paid nearly that much money. Thus, an economic stimulus package run by the government is an absurd inefficiency.
- The Keynesian view of economics is that government intervention in the economy is necessary to overcome down-turning business cycles. This fails to take into account the real-world experiences of history that it is government that causes down-turning business cycles. The government does this by imposing higher taxes, more entitlement spending, trade barrier tariffs, increased regulations, and more ominous fears.
- The Keynesian view of economics essentially means that the government picks winners and losers. The winners that it picks are inevitably welfare recipients (because they are totally under the government's thumb), special interest groups who pad Uncle Sam's pockets, companies who need to be "bailed out", Big Labor unions, and those who seek to benefit from increasing the government dole of entitlement spending. The losers are inevitably wealthy and high income individuals (because they have too much independence), small business owners who get classified as "rich", firms who try to engage in fair trade, our children and grandchildren who get saddled with greater debts, and every consumer who must now pay higher prices for all goods and services.
- The Keynesian view of economics was what was followed all throughout the Great Depression and throughout the economic malaise of the 1970s, and it is what has been increasingly more followed since 2006. People, it just doesn't work.
- Since this view of economics makes the government into a Godhead, it creates a condition of counterfeit nurturance. In essence, this means that people become ever more dependent on the government, which kills their spirit. Those who somehow find the way of being financially independent from the government are persecuted by taxation, litigation threats, and mainstream media attacks.
As the Heritage Institute's Brian Reidl has written, “Government cannot create new purchasing power out of thin air. If Congress funds new spending with taxes, it is simply redistributing existing income. If Congress instead borrows the money from domestic investors, those investors will have that much less to invest or to spend in the private economy. If Congress borrows the money from foreigners, the balance of payments will adjust by equally reducing net exports, leaving GDP unchanged. Every dollar Congress spends must first come from somewhere else...Government spending often alters the consumption of total demand, such as increasing consumption at the expense of investment.”
All of this is why Keynesian economics doesn't work. And all of this is why the Progressive Democrats and their allies lie to you and say that it does.
keynesian view of economics