1. The single most important aspect of the nation's leader is a vision for a better future, and a method for getting there.
"The economy, unemployment, taxes and how to manage the federal government's $14 trillion debt will be leading issues in the 2012 campaign." Issues Page - 2012 Election Center - Elections & Politics from CNN.com
But the Obama vision was all about Keynesian notions, e.g., saving is bad, and short-term massive spending is the solution to what ails our economy.
2. Intrinsic in Keynesian theory is the idea of taking from the wealthy and giving to the poor, based on the view that the poor will spend a greater fraction of their funds, and save less. One can see how this plan fuels Left-wing views. For example, Princeton economist Alan Blinder proposed 'Cash for Clunkers' to stimulate the economy by having the folks driving older vehicles, i.e., the poor, get newer cars. "And also, importantly to me, one of its objectives was to assist poor people who tend to own the clunkers. The way the law was written, you could only get the cash for the clunker if you bought a new car. And a lot of poor people can't afford to buy a new car.." Why One Economist Pushed Cash For Clunkers : NPR
a. For the theory to be correct, the handout must have a 'multiplier effect' on the economy. The administration claimed the same for food stamps: "The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP" http://www.ers.usda.gov/media/134117/err103_1_.pdf
3. Because of the flaw in the Keynesians' understanding of savings, the theory of the multiplier also falls apart. Taking money from wealthy people and giving it to poor people doesn't create more spending. It just changes who chooses where the resources go. Redistribution simply changes who starts the process. Forgotten in the political fervor is that the government got the resources via taxation....which means taxpayers have less to spend.
a. The real benefit of Keynesian theory is that the Liberal's who dole out the funds get a political benefit. "He Cares About Ordinary People Like Me" He Cares About Ordinary People Like Me ? Blog ? Barack Obama
4. Keynesian theory requires rapid and massive government spending, i.e., 'shovel-ready jobs.' But this is not the 1930's, and projects require planning, permits, competing bids, workers with specific skills, specialized equipment, etc. "With unemployment hovering near 10 percent nearly two years after President Obama signed his economic stimulus package, Mr. Obama is acknowledging that, despite his campaign promises, "there's no such thing as shovel-ready projects."
Obama: "No Such Thing as Shovel-Ready Projects" - Political Hotsheet - CBS News Ooops!
5. Not to forget, stimulus projects tend to be artificial, basically worthless, lasting only as long as the government continues to provide heavy subsidies. A perfect example is the heart of Obama policies, the business of "green" energy- ethanol, wind, solar. They are not attractive to consumers in a free market due to the price. And, subsequently, investors have realized that subsidies may not continue indefinitely, and are reluctant to invest. And the companies themselves realize this, and are cautious in hiring permanent employees. So, Keynesian stimulus actually encourages what is called 'fractional employment.'
"At The Brink," John Lott, Jr., chapter two.
6. Yet Liberals continue to propound these kinds of solutions. Their champion economist, Paul Krugman, unwittingly underscores the inanity, with this example:
'Paul Krugman is so frustrated by the lack of support for another round of stimulus spending that he's now calling for a fake alien invasion of the United States to spur a World War II-style defense buildup..... "If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months," he said. "And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better--"' Paul Krugman: Fake Alien Invasion Would End Economic Slump (VIDEO)
In reality, solving the problems of the economy is not what Keynesian, or Liberal policy is about.
It is about fairy tale, Utopian schemes to end inequality.
Folks should realize that that is the vision they voted into office.
"The economy, unemployment, taxes and how to manage the federal government's $14 trillion debt will be leading issues in the 2012 campaign." Issues Page - 2012 Election Center - Elections & Politics from CNN.com
But the Obama vision was all about Keynesian notions, e.g., saving is bad, and short-term massive spending is the solution to what ails our economy.
2. Intrinsic in Keynesian theory is the idea of taking from the wealthy and giving to the poor, based on the view that the poor will spend a greater fraction of their funds, and save less. One can see how this plan fuels Left-wing views. For example, Princeton economist Alan Blinder proposed 'Cash for Clunkers' to stimulate the economy by having the folks driving older vehicles, i.e., the poor, get newer cars. "And also, importantly to me, one of its objectives was to assist poor people who tend to own the clunkers. The way the law was written, you could only get the cash for the clunker if you bought a new car. And a lot of poor people can't afford to buy a new car.." Why One Economist Pushed Cash For Clunkers : NPR
a. For the theory to be correct, the handout must have a 'multiplier effect' on the economy. The administration claimed the same for food stamps: "The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP" http://www.ers.usda.gov/media/134117/err103_1_.pdf
3. Because of the flaw in the Keynesians' understanding of savings, the theory of the multiplier also falls apart. Taking money from wealthy people and giving it to poor people doesn't create more spending. It just changes who chooses where the resources go. Redistribution simply changes who starts the process. Forgotten in the political fervor is that the government got the resources via taxation....which means taxpayers have less to spend.
a. The real benefit of Keynesian theory is that the Liberal's who dole out the funds get a political benefit. "He Cares About Ordinary People Like Me" He Cares About Ordinary People Like Me ? Blog ? Barack Obama
4. Keynesian theory requires rapid and massive government spending, i.e., 'shovel-ready jobs.' But this is not the 1930's, and projects require planning, permits, competing bids, workers with specific skills, specialized equipment, etc. "With unemployment hovering near 10 percent nearly two years after President Obama signed his economic stimulus package, Mr. Obama is acknowledging that, despite his campaign promises, "there's no such thing as shovel-ready projects."
Obama: "No Such Thing as Shovel-Ready Projects" - Political Hotsheet - CBS News Ooops!
5. Not to forget, stimulus projects tend to be artificial, basically worthless, lasting only as long as the government continues to provide heavy subsidies. A perfect example is the heart of Obama policies, the business of "green" energy- ethanol, wind, solar. They are not attractive to consumers in a free market due to the price. And, subsequently, investors have realized that subsidies may not continue indefinitely, and are reluctant to invest. And the companies themselves realize this, and are cautious in hiring permanent employees. So, Keynesian stimulus actually encourages what is called 'fractional employment.'
"At The Brink," John Lott, Jr., chapter two.
6. Yet Liberals continue to propound these kinds of solutions. Their champion economist, Paul Krugman, unwittingly underscores the inanity, with this example:
'Paul Krugman is so frustrated by the lack of support for another round of stimulus spending that he's now calling for a fake alien invasion of the United States to spur a World War II-style defense buildup..... "If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months," he said. "And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better--"' Paul Krugman: Fake Alien Invasion Would End Economic Slump (VIDEO)
In reality, solving the problems of the economy is not what Keynesian, or Liberal policy is about.
It is about fairy tale, Utopian schemes to end inequality.
Folks should realize that that is the vision they voted into office.
