2.6 miles closer
There is a debatable economic theory and model, Keynesian economics, which has been implemented at different times in various countries across the globe. The theory was postulated by a British economist, John Maynard Keynes (1883-1946), during America’s Great Depression. His observation was that during the Depression peoples’ natural reaction was to hoard their money, buying as little as possible, stopping the natural circular flow of money from one hand to another, decimating the economy day by day. That is obvious enough, so he suggested the public sector should intervene to increase and encourage spending, whether increasing the money supply or buying things on the market itself.
Keynesian economics depends on people not saving too much money and relies on the idea that people spend as much as possible. And when these two factors slow their momentums the first objective is to print what I like to call Monopoly money or to redistribute wealth to the poorer members of society as they will more than likely not save it but spend it.
The big difference between the Keynesian model and others is that rival models exclude the public sector intervening or interfering with the natural ebb and flow of any given economy as markets should be able to achieve balance on their own. The subject of economics is theoretical, though, and all you can do is test theories when there are no absolutes. This theory has its merits for desperate times but involving the public sector enables governments to purchase and potentially gain control of private sector industries. While Keynes developed a theory for a quick fix what I fear is government-controlled entities, such as health care providers and banks, which no longer compete in the American game of free enterprise but instead force you to purchase their insurance or to take on their interest rates because there is no other competition to compete with.
In Washington, Keynesianism is a great solution because our government can obviously spend more than it has, whereas everyday people like you and me cannot spend more than we have. Obama’s 862 billion dollar stimulus plan was a Keynesian move right out of the playbook and, I don’t know about you, but I don’t feel any richer. I have not felt the ability to spend frivolously in a long time and I save everything I can. I am unintentionally bucking the Keynes system, not out of conscious spite of his theory or our government, but out of fear of losing my job or my home, and I think a lot of others are, too. Keynesian economics depends on people not doing exactly what I and, I can only speculate, many others are doing. I do not feel stimulated and my future children and their children have a debt to pay and they are not even born yet.
In an article written by tax reform expert Dan Mitchell, he documented Keynesian economics being used unsuccessfully by Hoover and Roosevelt, Japan throughout the 1990s, and Bush in 2008. Now Barack Obama is doing the largest Keynesian stimulation in American history.
American economist, Kevin Hassett, addressed in his article “Obituary for Keynesianism” that when Keynesianism fails it is not because the idea is insufficient but because not enough money was injected into the market. 862 billion dollars? Obama’s departing chairman on his Council of Economic Advisers, Christina Romer, suggested the stimulus package should have been 1.2 trillion dollars, or forty percent larger.
A 2002 study by economists Richard Hemming, Selma Mahfouz and Axel Schimmelpfennig of recessions in 27 developed economies from 1971 to 1998 determined that increased spending by government was hardly noticeable in most cases and negative in some.
“…Supporters of this type of stimulus are either unfamiliar with the literature or willing to ignore it.”
“The result is policy that is harmful to our country and inconsistent with modern economic science. If the Obama economic team were medical doctors, they would be pushing the use of medicine not approved by the Food and Drug Administration.”
2,032.6 miles to go.
There is a debatable economic theory and model, Keynesian economics, which has been implemented at different times in various countries across the globe. The theory was postulated by a British economist, John Maynard Keynes (1883-1946), during America’s Great Depression. His observation was that during the Depression peoples’ natural reaction was to hoard their money, buying as little as possible, stopping the natural circular flow of money from one hand to another, decimating the economy day by day. That is obvious enough, so he suggested the public sector should intervene to increase and encourage spending, whether increasing the money supply or buying things on the market itself.
Keynesian economics depends on people not saving too much money and relies on the idea that people spend as much as possible. And when these two factors slow their momentums the first objective is to print what I like to call Monopoly money or to redistribute wealth to the poorer members of society as they will more than likely not save it but spend it.
The big difference between the Keynesian model and others is that rival models exclude the public sector intervening or interfering with the natural ebb and flow of any given economy as markets should be able to achieve balance on their own. The subject of economics is theoretical, though, and all you can do is test theories when there are no absolutes. This theory has its merits for desperate times but involving the public sector enables governments to purchase and potentially gain control of private sector industries. While Keynes developed a theory for a quick fix what I fear is government-controlled entities, such as health care providers and banks, which no longer compete in the American game of free enterprise but instead force you to purchase their insurance or to take on their interest rates because there is no other competition to compete with.
In Washington, Keynesianism is a great solution because our government can obviously spend more than it has, whereas everyday people like you and me cannot spend more than we have. Obama’s 862 billion dollar stimulus plan was a Keynesian move right out of the playbook and, I don’t know about you, but I don’t feel any richer. I have not felt the ability to spend frivolously in a long time and I save everything I can. I am unintentionally bucking the Keynes system, not out of conscious spite of his theory or our government, but out of fear of losing my job or my home, and I think a lot of others are, too. Keynesian economics depends on people not doing exactly what I and, I can only speculate, many others are doing. I do not feel stimulated and my future children and their children have a debt to pay and they are not even born yet.
In an article written by tax reform expert Dan Mitchell, he documented Keynesian economics being used unsuccessfully by Hoover and Roosevelt, Japan throughout the 1990s, and Bush in 2008. Now Barack Obama is doing the largest Keynesian stimulation in American history.
American economist, Kevin Hassett, addressed in his article “Obituary for Keynesianism” that when Keynesianism fails it is not because the idea is insufficient but because not enough money was injected into the market. 862 billion dollars? Obama’s departing chairman on his Council of Economic Advisers, Christina Romer, suggested the stimulus package should have been 1.2 trillion dollars, or forty percent larger.
A 2002 study by economists Richard Hemming, Selma Mahfouz and Axel Schimmelpfennig of recessions in 27 developed economies from 1971 to 1998 determined that increased spending by government was hardly noticeable in most cases and negative in some.
“…Supporters of this type of stimulus are either unfamiliar with the literature or willing to ignore it.”
“The result is policy that is harmful to our country and inconsistent with modern economic science. If the Obama economic team were medical doctors, they would be pushing the use of medicine not approved by the Food and Drug Administration.”
2,032.6 miles to go.
