Stimulus The Political Tool

Stimulus The Political Tool PDF Version

Many times, I have written that whether it is monetary or fiscal that stimulus is a political tool. It has no honest application. It is and has been a big lie from day one.

Why is it impossible for stimulus to to have a net positive effect on the economy? I can give all kinds of explanations as to why, both abstract and down to earth. That is nice and perhaps would be entertaining but it is not necessary. Human nature does not allow these programs to work.

Keynes, the father of stimulus, certainly argued that objectivity and non-bias were completely necessary. Keynes did not grasp that objectivity and non-bias are not possible in government. Government cannot make economic decisions. Governments make only political decisions.

A kid with $5 in a candy store makes an economic decision.  Congress or the Federal Reserve make political decisions. That being the case, there never has been and never will be a case where an economic decision is made with respect to stimulus. It  is a contradiction and impossible. Keynes called for non bias. But, there is no way to get a non biased decision where stimulus is concerned.

So what we have is stimulus applied one way or another every year. Leaders always find it necessary.  Stimulus is very good for those who get it, but that is not you. To benefit from stimulus takes massive political power. I do mean massive and that amount of power is what it takes to dictate policy to government.

Lets see, who has massive political power? Is it the rich or the poor? Look at how the income distribution has changed since stimulus was virtually made mandatory with the Full Employment Act of 1978.

What percent of the nation’s income went to the upper 1% in 1978? Find the answer online.

What percent of the nation’s income went to the upper 1% in 2021? Find that answer online also.

Use 5% instead of 1% if that is easier.

What you will notice is a massive income increase for the upper 1 percent who have massive political power and an impoverishment at the bottom who just pay taxes.

The question students need ask their economics professors why it is deemed good to teach students theories when there is a genuine guarantee that they will never be used at the right time?

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About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
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