Keynesian Economics Explained
Some prominent Keynesians actually believed war was good for the economy because they thought any such massive fiscal stimulus as war spending inevitably would boost the economy enormously.
Quoting Paul Samuelson:
When this war comes to an end, more than one out of every two workers will depend directly or indirectly upon military orders. We shall have some 10 million service men to throw on the labor market. [DRH comment: he nailed that number.] We shall have to face a difficult reconversion period during which current goods cannot be produced and layoffs may be great. Nor will the technical necessity for reconversion necessarily generate much investment outlay in the critical period under discussion whatever its later potentialities. The final conclusion to be drawn from our experience at the end of the last war is inescapable–were the war to end suddenly within the next 6 months, were we again planning to wind up our war effort in the greatest haste, to demobilize our armed forces, to liquidate price controls, to shift from astronomical deficits to even the large deficits of the thirties–then there would be ushered in the greatest period of unemployment and industrial dislocation which any economy has ever faced.
The post-war bust was a lot smaller than the Keynesians expected. The US unemployment rate went up from 1.9 percent to 3.6 percent between 1945 and 1947 while federal spending dropped 60%. The Broken Window Fallacy really is a fallacy. Much of what was produced during the war was consumed or destroyed and the free market really is capable of putting people to work.
By the way, this is my second reference to The Fifth Element today. Great movie. In my opinion, one of the best made in the 1990s, not least because of the great performances by all of the main characters including the illustrious Gary Oldman. There are so many other things right about that movie including the music and the costume design (by none other than Jean-Paul Gaultier). The weirdness of the costumes and alien designs works very well with the humor.
Have you seen The Fifth Element yourself?
Keynsian economics is an unsustainable system that the left peddles to unsuspecting leftists lol
At least it's got some major downsides like the way it enables the state to confiscate wealth from savers. But then again, cryptocurrencies have inflation going on to reward network participants in various roles such as miners, blockproducers or content creators and curators on Steem.
It's problematic if ownership of a scarce money supply becomes a major focus liked did in the gold obsessed Spanish Empire before the British and their superior guns put an end to the Spanish domination of the world's oceans.
But the Keynesian over-emphasizing the demand side is problematic, too.
The problem is that central banks are creating money on an exponential progression that cannot be stopped without it imploding. We are on a knives edge of having a deflationary collapse or hyperinflation.
90% of the fiat being created is going directly to the elite top 1% in the form of debt. The rich use debt to aquire assets pushing up the value of stocks and realestate. Where is all the inflation from the money being printed?? The inflation is in assets, which is what the rich own. This is real reason why the rich are getting richer and the poor are getting poorer. poor people don't own assets.
I agree with that fully except that a very large percentage of poor people would be poor no matter what.
There's always going to be poor people but in a free market without chroni socialism and high inflation, poor people benefit the most with a stable currency. This has been true throughout the last 5000 years.
Crony capitalism. That's what we have now. And yes, a stable currency is good.
Yes, I call it Chroni socialism because the socialist government is the head of snake. The currupt government is in collusion with banks and corporations. Free market capitalists and libertarians have been trying to point it out for years.
No! Never heard of it! It never came to Thailand!
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