Of Keynes and Men
So what or who is this guy Keynes? You’ve heard of him right? Well, even if you haven’t, this is the reason for stuff like “stimulus”. Ok, let’s go over two things. First, what does this guy Keynes have to do with economics, and what does he have to do with our current situation.
What is Keynesian economics? Well, in a nutshell, it is fiscal stimulus with far reaching government intervention. It basically says that the private sector can’t manage itself, and that it needs the government to take care of it when it makes “bad” choices. When people want to save their money (take it away from the economy at large), this is very bad. …wait, seriously? One of your basic principles is that saving is bad?
What of Keynes and Obama. So here’s the genius behind the stimulus…the magic formula…the brilliance. You first guess at how much the economy should be producing (they guess 15 trillion), then you guess at what you think it is actually producing (they guess 14 trillion). Take the difference (1 trillion) mix in a “Keynesian multiplier”, and you get 650 - 900 billion.
So here’s the conclusion. If some idea is being talked about on TV that doesn’t make much sense initially… it probably will make less sense when you investigate it. Really all this Keynesian stuff does is allow the government to make economic decisions with a license to expand itself. Wait, you mean I can help the economy, and give myself more power at the same time? Sweet!
In all of that though, I doubt that Keynes himself would green-light this nonsense. — You guess that the economy is producing 14 trillion? We have a 677 billion dollar trade deficit! The interest… yes I said interest, on the federal debt is 138 billion! And those are the government’s numbers! Even if you disagree with Keynes, at least he wasn’t an idiot.
