Get Ready To Taste The Bitter Side Of Keynesian Economics

http://www.businessinsider.com/the-bitter-side-of-keynesian-economics-2010-5 ^

[blam]

Get Ready To Taste The Bitter Side Of Keynesian Economics

Michael Snyder
May. 16, 2010, 9:48 AM

Most Americans have no idea what the term "Keynesian economics" means, but the truth is that it has been deeply influencing U.S. economic policy for decades.

Essentially, it is an economic theory that originated with a 20th century British economist named John Maynard Keynes, and it advocates government intervention in the economy in order to smooth out economic cycles. The general idea was that lower interest rates and increased government spending could be used to increase aggregate demand when the economy was experiencing a downturn, thus increasing economic activity and reducing unemployment.

And you know what?

To a certain degree, Keynesian economic theory actually does work.

Increased government spending DOES stimulate the economy.

But the problem is that governments all over the world decided that they would just run constant budget deficits and stimulate the economy all the time.

All of this debt has brought a temporary prosperity to many of the nations around the globe, but there is one huge problem with debt.

It has to be paid back eventually.

With interest.

So what happens when nations have to start spending huge chunks of their national budgets just to service all the debt that they have piled up?

Well, that is when they taste the bitter side of Keynesian economics.

In fact, we see that starting to happen all over the world right now.

All of a sudden, governments all over the globe are talking about huge budget cuts, pay decreases, and higher taxes.

[snip]

[Mr Ramsbotham]

Pain is the coin by which we purchase pleasure.

[deadrock]

Ah, but is all the fault of capitalism.

[Steely Tom]

Everything you need to know about John Maynard Keynes is summed up in the observation for which he is most famous: "In the long run we are all dead."

[Steamburg]

I’m no longer sure that it’s Keynesian or Kenyon. In either case, the idea is to install a Dictatorship or they really don’t have a clue what they are doing.

[JohnLongIsland]

When was there a bright side to Keynesian economics?

[central_va]

Keynesian Cloward-Piven ™ economics

[Uncle Ike]

I seriously doubt that the vast majority of Politicians and Gummint Officials have any idea what Keynsian Economics is — the truth is that the process of “buying the votes of the populace with public largesse” kinda looks like the Keynsian system....

[Jack Hydrazine]

With blessings from the UK!

[Captainpaintball]

I guess you can call Obama’s economic program Ken-yesian in nature, or just Kenyan?

[phockthis]

sfl

[ntmxx]

Here’s (a past post) all one needs to know about Keynesian economics and the many flavors of Socialism: Marxism, Leninism, Maoism, Stalinism, Progressivism, Anarcho-syndicalism, Environmentalism and Junk Science...;

Steal first then have someone else pay later!

Or, “its all good” until you run out of other peoples monies.

[Lancey Howard]

A California Democrat Speaks the Truth! (May 30, 2009)

Nearly all of the billions of dollars in cuts the administration has proposed would affect programs for poor Californians...

“Government doesn’t provide services to rich people,” Mike Genest, the state’s finance director, said on a conference call with reporters on Friday. “It doesn’t even really provide services to the middle class.” He added: “You have to cut where the money is.”