Why Keynesian Economics will never work.... It's stupid, for starters...

The Keynsian school of thought...

When the economy contracts, people argue that the government should use money (injecting stimulus) in an economy.

You only need to see the debacle of 2008 to see this does not work, but instead creates false markets. (share buy backs at no interest, anyone?)

The idea of big government spending as a national remedy, started in the 1930s when the United States was in the the Great Depression.

English economist John Maynard Keynes argued that the government could boost the economy if it borrowed money then spent it. (because borrowing money from banks and paying interest on it always works out well, right?)

His theory - known as Keynesian economics - meant that money would find its way into people’s wallets through government borrowing, and thus people would then spend the money, and thus revitalize the economy.

Following the Keynesian paradigm, Obama and Democratic Congress increased spending through the extension of unemployment benefits, the health care takeover, and bailouts of financial institutions.
Then also throw in massive increases in other spending and the funding to the of hundreds of billions of dollars.
('special interest' projects. ....corruption and socialism , anyone?).

In theory, then - all this government spending should have spurred demand. It should have created more jobs to meet to meet this new demand....mmmmm....
Demand-side economics does not create jobs, but only creates corruption through arbitrary redistribution.(socialism).

Keynesian theory looks quite impressive on paper, if only it didn’t have this one logical fallacy.

And it's quite a biggie.....oops...

Government can’t inject money into the economy without first taking it out. Doh!

As the government puts money in the one hand, it borrows money from the other.
Government spending benefits those people who receive the money, not those who produce wealth.

Quite simply - The economic model is unsustainable.
The private sector already understands that the government “stimulus” stimulates nothing( long term), and is a short term 'fix' that's only sets up further hardship in the future.

It involves borrowing from the future. From your children's earnings....Nice.

The Keynesian response is to say that there will be an increase in the overall available cash, (it's not yours however- , but your unborn child's), which will increase consumer spending. It's a gift of an empty box, if you can think past next week...

When the government gives money , that money is taken from someone else .

.... This can only come in two forms: taxation or borrowing.

“their ain’t no such thing as a free lunch,” as Milton Friedman said.

Socialists close their ears to this reality.... They live in a perpetual delusion.
Any big injection of dollars (from the government), without any increase in productivity - is purely inflationary and the currency loses its value.

Keynesianism Has Failed

In Great Depression, Herbert Hoover increased taxes dramatically. From 25% to 63% .
Protectionist policies (crony capitalism in other words), increased intervention into the private sector and - from the Keynesian perspective - boosted government spending.....
The debt increased by 47 percent in 4 years using this policy.
Growth went down and unemployment went up.

Then FDR who followed the same doctrine.
Tax rates went to 79% !! and government intervention increased greatly.

GDP, under FDR, remained fairly flat and unemployment remained high.
Staggeringly high until 1940.

There's nothing like a good war, to increase productivity though, eh...?

Spending maniacs (known as keynesians) will say that from 1940 onwards , GDP grew and unemployment went down rather dramatically.

There's nothing like a good war, to increase productivity though, eh...?

The biggest jump in debt, and employment (and GDP) came from the participation in WWII.
It was all financed by the government through debt and the taxpayer.

GDP came from the manufacture of armaments( and all the other connected industries that grow due to this)
The war effort employed millions of active duty, and civilian members in every area.

Unemployment increased after the war.
After the years following 1945, the dust then settled.

The United States was the last man standing.

Pretty much everything was destroyed in Europe and Asia. The _ entire_world had just become America’s best customer.

....when no other country could physically do business, and supply all that was needed, America could supply.

GUESS WHAT..?

Private sector and free market to the rescue!!!!!!!

Is it clear as to why Keynsian economics is a flawed economic model...?

It's based on borrowing money to create economy, rather than productivity to create economy.

Reasoning and data show that Keynesian is a juvenile approach to economics.

An economic model designed to push the socialist agenda....

It's absolutely nuts, in other words...