Keynes

The recent awarding of the Nobel Prize for Economics to Robert E. Hall and Michael Woodford shows that the Keynesian paradigm is alive and well. That is bad news for everyone else.

No matter how many times Austrians debunk the Paradox of Thrift, it appears in one form or another, this time in The Atlantic, which claims that retirees are too miserly in spending their savings, thus putting the economy in danger.

One of the most popular ideas in the Keynesian lexicon is the belief that through monetary manipulation and government outlays, an economy can spend it self rich, thanks to the “multiplier.” It is dangerous nonsense, like so much else of what Keynesians preach.

Keynesians claim that government debt is no problem because “we owe it to ourselves,” as though owners of US debt don’t care if they are repaid or not. Taxpayers, who actually will pay the debt, are left out of the equation.

While Paul Krugman certainly was well-known as an academic economist, he won his Nobel Prize in 2008 for his anti-George W. Bush commentary in the New York Times.

Keynesians claim that government debt is no problem because “we owe it to ourselves,” as though owners of US debt don’t care if they are repaid or not. Taxpayers, who actually will pay the debt, are left out of the equation.

Keynesian theory says that the way to end a recession in which the economy is in a “liquidity trap” is for government to ramp up spending. Murray Rothbard demonstrated that this policy actually blocks an economic recovery.

The costs of war are vast and horrific. Most people know this, which raises the question of why the US government seemingly can’t live without it.

Keynesians claim that recessions occur because of a lack of consumer demand. However, demand comes from what we produce, so a growing economy needs more production.

In Graham Moore’s The Wealth of Shadows, John Maynard Keynes is a hero for his monetary manipulations. However, in the real world, the economics of Keynes has brought economic ruin.