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 Post subject: The Keynesian Economics Scam
PostPosted: Fri May 19, 2017 9:56 am 
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Joined: Mon May 20, 2013 7:30 am
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"How Magical is the Keynesian Multiplier?":

"......Only if the amount of money in the economy increases, all other things being equal, will spending in money terms follow suit. However, in this case also the increase is not on account of some multiplier but on account of the increase in the money supply. The increase in monetary expenditure on account of an increase in money supply cannot however produce the expansion in real output as the popular story has it. All that it will generate is a reshuffling of the existent real savings. It will enrich the early receivers of the new money at the expense of later receivers or no receivers at all.

Obviously, then, a loose monetary policy which is aimed at boosting consumers’ demand cannot boost real output by a multiple of the initial increase in consumer demand. Not only will loose money policy not lift production, but on the contrary it will impoverish wealth generators in exactly the same way as the increase in government demand does.

John Maynard Keynes’s writings remain as influential today as they were eighty years ago. His ideas remain the driving force of economic policymakers at the Fed and government institutions. These ideas permeate the thinking and writings of the most influential economists on Wall Street and in academia.

The heart of the Keynesian philosophy is that what drives the economy is demand for goods. Economic recessions are predominantly the result of insufficient demand. In the Keynesian framework an increase in demand not only lifts overall output but that output increases by a multiple of the initial increase in demand. Within this framework something can be created out of nothing.

In the real world, an artificial boost in demand that is not supported by production leads to the depletion of real savings and, contrary to the Keynesian view, to a shrinking in the flow of real wealth, i.e., it results in economic impoverishment."

Regards, onebornfree

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