The End of Keynesian Economics, Hopefully

A an economist, I explain things in one or or two sentences. Keynesian economics has never had a chance of working, not in the United States and not in the world. Why? It is missing two critical ingredients which are assumed to be present but are missing. First, governments are not capable of making economic decisions. Second, a straw man is assumed but there is no such thing. That is two sentences but either statement would suffice.

So, what does a Keynesian solution actually accomplish? There is a feeding frenzy, based on personal gain, to benefit from newly available government money. Income and wealth are transferred from the bottom to the top. The free market principle of out with the old and in with the new is thrown out the window. Resources are allocated increasingly inefficiently until a recession, worse than ever occurs.

So, let us suppose the finest Keynesian model created by the most learned Ivy League economist is used. What happens in that case? The same thing happens as would, if the world’s finest astrologer came up with a plan. Neither has any utility to society. I will say that astrologers charge very little for what they do and they are a lot of fun to listen to. There might be a slight bit of utility on the part of the astrologer based on entertainment value.

About Fantasy Free Economics

James Quillian is an independent scholar and economist.
This entry was posted in Daily Comments. Bookmark the permalink.