jump to navigation

John Maynard Keynes and “Keynesianism” economic WAR! September 13, 2011

Posted by tetrahedron in Uncategorized.
Tags: , , , , , , ,
trackback

War was the economic stimulus of last resort when politicians were so confused in their understanding of economics that they would not allow the government to go into debt except for national emergencies. But Keynes said there are less destructive ways to get money into people’s pockets and stimulate the economy and I can’t say how right he was.(America: Losing the Empire)

Workers could be paid to dig ditches and fill them back up, and it would stimulate the economy. What a lagging economy needed was simply demand (available purchasing power).  Demand would then stimulate businesses to produce more “supply”, creating more jobs and driving productivity. The key was that demand (money to spend) must come first.

The Chinese have put workers to work building massive malls and apartment buildings, many of which are standing empty for lack of customers and purchasers. It may be a wasteful use of resources, but it has succeeded in putting wages in workers’ pockets, giving them the purchasing power to spend on products and services, stimulating economic growth; and unlike wasteful war spending, the Chinese approach has not involved death and destruction.

Advertisements
%d bloggers like this: