John Maynard Keynes deserves an award. His theories regarding economics are perhaps the most convoluted and the most lacking in common sense that I have ever seen. Ironically enough it’s his economic theories that are being taught in class today. Oh joy, another generation of people on credit cards.
You see, Mr. Keynes’s economic theories state that deficit spending on the part of government actually helps the economy by somehow increasing aggregate demand and consumption, which somehow leads to increased production. Say what now? The government prints more money and borrows more money to finance it. Problem solved, right? Wrong! You see there’s one slight problem. Borrowed money must be PAID BACK. Where do you think the money is gonna come from when the countries our government borrows from to finance deficit spending get tired of stringing us along and begin to call our debts? That’s right, the US taxpayer. Taxes will increase dramatically in order to pay back all these foreign loans, leading to a dramatic increase in the cost of goods and services. Leaving us with LESS money in our pockets to spend. Guess what that would lead to? That’s right, LESS consumption? Care to take a guess at what LESS consumption does? That’s right. It leads to a DECREASE in aggregate demand for good and services. And finally LESS demand for goods and services leads to LESS production, which then leads to an economic DOWNTURN, not an economic upswing as Keynes theorizes.
Keynes has epically FAILED to learn from history. There is an economic theory as old as time itself that people have subscribed to in flourishing societies: You cannot spend money you do not have. Or, to put it bluntly: Ya can’t spend what ya ain’t got! Or if you do have to borrow, make darn sure you earn enough to pay it back! I’d say that economic FACT is more sensible than one that says “can’t pay it back? borrow more!”
And these are the theories widely accepted and taught in our economics classes today over economics based on working with an actual budget? Pathetic!