The Madness of Keynesian Economics
The completely ignorant… I mean.. low information voter that put the Marxist regime back in power will certainly not understand any of this…. but then… neither does the liberal media. Obama has increased our debt $10T to $16T… and he wants more new spending…. NOT CUTS. Obama will NEVER put forth a meaningful cut to any government program. NEVER.
“Keynesian Economics” is the insane belief that the economy can be stimulated by government spending. It provides the excuse to depart from common sense that allows politicians to ignore the alarm bells. It is ludicrous mainly because our government doesn’t have any money to spend. History has repeatedly proven that this is nonsense. Yet Democrats will not let go of the Keynesian Myth. The government is the center of society, America’s modern Democrats want to believe. So they cannot shake the dogma that our entire economy depends upon government spending.
The New Deal was the largest real-world test of the Keynesian Myth in recent history. Franklin Roosevelt’s Treasury Secretary Henry Morgenthau confessed that the “New Deal” was a failure in sworn testimony before Congress on May 9, 1939.
“We have tried spending money. We are spending more than we have ever spent before and it does not work.”
[B]It’s like this: You scoop water from the deep end of a swimming pool with a bucket, run around to the shallow end, and then pour the water into the shallow end of the pool. Can you make the shallow end deeper? The entire swimming pool is one inter-connected whole. You are accomplishing nothing… except spilling some water (waste) and using up energy (administrative overhead).[/B]
But nothing real has changed. So the economy will end up right back where it was before — after a sugar rush hangover. Salaries might be bigger only due to inflation lowering the value of the dollar.
Liberals argue that Roosevelt’s stimulus was not big enough and it took World War II to finally end the Great Depression. However, Obama’s most out-spoken economist lets the truth slip: The Great Depression ended partly because Adolf Hitler drove wealth out of Europe and into the United States. As European war loomed in 1938 and 1939, genuine increases in real investments flowing from Europe fundamentally grew the economy. This was real money invested in the country, not government manipulation.
Christina D. Romer is Obama’s most eager cheerleader for the Keynesian madness. But she cannot avoid giving away the store in the process. Romer reluctantly lets the cat out of the bag. It was not World War II deficit spending but the military draft removing nearly 10 million men from the work force. [B]After the war, many of America’s global competitors had been laid waste while the USA was untouched.[/B]
[B]Top economists show us that the government cannot expand the economy through deficit spending because borrowing disrupts and displaces other economic activities[/B], including Milton Freedman, E. Cary, John Taylor of Stanford, Gary Becker and Eugene Fama of the University of Chicago and Greg Mankiw and Robert Barro of Harvard. In the end, the government simply moves economic activity around (benefitting campaign donors) without any real improvement. [B]As economist Hal Varian of the University of California at Berkeley points out, private investment in the economy builds a foundation for long-term, sustainable growth and prosperity, whereas government spending does not.[/B]