Skip to comments.The Keynesian Dead End
Posted on 06/26/2010 5:59:46 AM PDT by shove_it
Spending our way to prosperity is going out of style.
Today's G-20 meeting has been advertised as a showdown between the U.S. and Europe over more spending "stimulus," and so it is. But the larger story is the end of the neo-Keynesian economic moment, and perhaps the start of a healthier policy turn.
For going on three years, the developed world's economic policy has been dominated by the revival of the old idea that vast amounts of public spending could prevent deflation, cure a recession, and ignite a new era of government-led prosperity. It hasn't turned out that way.
Now the political and fiscal bills are coming due even as the U.S. and European economies are merely muddling along. The Europeans have had enough and want to swear off the sauce, while the Obama Administration wants to keep running a bar tab. So this would seem to be a good time to examine recent policy history and assess the results.
(Excerpt) Read more at online.wsj.com ...
We are talking about socialists whose entire power derives from spending other people’s money.
They will never change.
We don't need them to change, the people will do it for them. Enjoy what you can of the summer FRiends because we have one hell of a ride coming our way after Labor Day, but stay vigilant while setting on the porch sippin' your mint juleps while recharging your batteries.
End? Ha! They’ve only just begun to spend!
Any idiot knows that spending money does not lead to prosperity. It is saving, investment and production that result in increased wealth. The problem is that we are overrun with those who lust after power and those who covet other people’s money. That coalition is a majority. And reason is foreign to them. They are run by their base and immature desires.
In Obamas case it has nothing to do with stimulating economic growth, it is entirely all about buying government power and paying off select constituencies. The most transparently corrupt administration and CONgress in history has bankrupted the greatest nation on earth. They are now preparing to double down with their “Robin Hood” scheme by taxing all viable economic endeavors into oblivion.
Capitalism is unfair because “some” people get wealthy. Obama is trying harder to make sure all people get to enjoy misery.
What healthier policy turn? The only reason there is a policy turn is because they have all finally run out of money to spend. Now that their policies have destroyed the ability to generate jobs, capital, wealth, etc. it's a bit late to think that by not passing additional spending the ship will right itself.
Never forget that the financial "panic" was CAUSED by the incoming Democratic congress which never wasted a moment in blaming Bush for the economy as soon as they got into power aided by the complicit media who were trumpeting that we were in a 30's depression even when unemployment was at only 6%.
These lies are what caused people to close their pocketbooks and draw back... which spurred on the collapse.
The Democrats and the media knew what they were doing the entire time. They knew they could collapse the economy and Blame Bush for it.
This downturn was NOT inevitable. It was what the Dems planned to get their guy into power.
Yes, maybe Keynesianism is having its Ceausescu moment. I sure hope so. Now we just need SCOTUS to strike down national-socialist healthcare so that it can never rise again. If those two things happened, we could consider Obama to have been, in some sense, a success.
Like many bad ideas, the current Keynesian revival began under George W. Bush. Larry Summers, then a private economist, told Congress that a "timely, targeted and temporary" spending program of $150 billion was urgently needed to boost consumer "demand." Democrats who had retaken Congress adopted the ideathey love an excuse to spendand the politically tapped-out Mr. Bush went along with $168 billion in spending and one-time tax rebates.
The cash did produce a statistical blip in GDP growth in mid-2008, but it didn't stop the financial panic and second phase of recession. So enter Stimulus II, with Mr. Summers again leading the intellectual charge, this time as President Obama's adviser and this time suggesting upwards of $500 billion. When Congress was done two months later, in February 2009, the amount was $862 billion. A pair of White House economists famously promised that this spending would keep the unemployment rate below 8%.
Deficit spending deepens and lengthens the recession. The stimulus was a chance Obama and the Democrats seized upon to raid the public treasury, hoping the economy would then self-correct,as it eventually will if it’s left alone, then take the credit. America has been the victim of the biggest scam in history, and may take years to recover.
The only policy that will work is to create an environment that is conducive to business growth. Lower taxes, lower regulation to allow more capital and more human energy to be directed toward business growth and higher employment.
Any policy that moves us away from that will fail.
Any policy that moves us toward that will succeed.
It really is that simple.
“Any idiot knows that spending money does not lead to prosperity.”
Well, actually the point of the editorial was to say there are blithering idiots like Larry Summers and Barack Obama who actually disagree with that assessment. Fortunately, there are real leaders in the world such as Angela Merkel who are more inclined to take an “evidence-based” approach to fiscal and monetary policy. These leaders will rebuff Obama’s self-serving efforts to convince them that the solution to a hangover is another round of drinking.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
~~Ludwig Von Mises
Obama DOES know that spending doesn’t lead to prosperity. Prosperity is not his goal. Power and destruction of all that is good and decent and productive. That’s what his gang is about. They are driven by bitterness, hatred and envy.
The reality is that the ‘spend your way to prosperity’ model DOES NOT WORK. Never has, and never will.
These wrongheaded, over-educated scumbags use it as a tool by which to advance their cause: The destruction of America and the establishment of a socialist hellhole in its place.
I want no part of it. It’s time to take back the country.
And their numbers continue to grow due to higher birth-rates and immigration of like-minded people. Game, set, match.