What if Keynesian ain’t even Keynesian?

John Maynard Keynes

John Maynard Keynes

Occasionally, FAB delves provides common-sense commentary on a wide range of important topics.  We’ve mentioned before the toxic effects of excess debt, both private and public.  We’ve also talked about the fact that it’s simply going to take some time to burn that debt off.

Unfortunately, there is no shortage of “experts” who encourage us to go on another spending binge at the expense of our children.  (What we’re actually buying is votes for politicians, but we’ll defer that discussion for now.)  These people are often called “Keynesian,” after early 20th-Century economist John Maynard Keynes.

We’ve always believed that (what we thought was) Keynesian economics had many problems.  First of all, it stimulates consumption, not production.  Consumption of consumer trinkets isn’t as beneficial to our economy’s long-term health as is investment in productive capacity and the creation of jobs.  Second, since many of our consumer trinkets actually come from overseas, we might just as easily be stimulating somebody else’s economy instead our own.  Third, it just hasn’t ever seemed to work in our lifetimes.

More recently, we’ve been asking ourselves, “Would Keynes really advocate borrowing trillions of dollars from the Chinese for our children to pay back?”  As it turns out, maybe not.  Here are a couple of well-written articles that explain why Keynes would never have approved of the folly and deceipt being committed by modern politicians in his name:

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