Monday, December 9, 2013
Multiplication Fable
The performance of the American economy during World War 2 is proof-positive that the Keynesian multiplier effect is absolute rubbish. The U.S government spent massive amounts of money and, while, yes, the total GDP of the country did go up, the private sector component of it actually WENT DOWN................................................................................And this whole notion that it was the war that got us out of the Depression is also a load of bullshit. The American economy was a veritable mess during the war (lots of guns and very little butter) and all of the available data substantiates this fact; production of durable goods - DOWN, consumption - DOWN, investment spending - DOWN, rationing - UP....And it isn't even as if those Keynesians of that day had ever once predicted such a thing in the first place, most of them in fact actually saying that the opposite would happen and that we would probably need yet another massive infusion of spending in order to prevent yet ANOTHER depression. It was only many decades after the fact that these fools concocted this whole "war and other disasters are good for the economy" bullshit..................................................................................P.S. And for those of you who would counter this by pointing to the 16 million citizens serving in the military as a reason for the lowered GDP, I would respond by saying, yes, but only to a degree. a) Not all 16 million of these people were serving simultaneously. b) Close to 30% of these individuals never even left the mainland. c) A lot of the money that was paid to these soldiers eventually found it's way back to America. And d) even in 1945, 16 million people was only about 11% of the total population anyway and so it couldn't have been a major factor period.
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4 comments:
Do you get the point that this is essentially Keynesians and similar lightweight fascists* arguing of the absolute necessity of the MIC.
* = Used with regard to the definition of fascism, in regards specifically to how these people favor strong central control of the economy. Referring, for example, to the Webster Student Dictionary. Leftist/socialist/progressive ideology matches the middle part of this definition: "a political system headed by a dictator in which the government controls business and labor and opposition is not permitted "
Progressives tend not to favor dictator, so they don't meet that part of the definition. I do have to wonder about "opposition is not permitted" though. To a man, every SINGLE Democrat/liberal/etc I have talked to thinks that it is OK for the government to punish people for the mere act of making a film such as the Citizens United example that criticized Hillary.
Back to the subject: Keysianism is too close to the authoritarian heart of fascism.
Well, I do know that Mr. Keynes was in favor of eugenics, for one thing.
That, and their predictions have never once come true. At the end of the World War 2, for example, when Truman and the Republicans in Congress decided to radically CUT spending, do away with price supports, and peel away even more on trade restrictions, all of these clowns predicted yet another depression and just the opposite happened. How this absurd philosophy was ever able to resurrect itself is mind-boggling to me.
Hey Will, Mr. Sanders is concerned about you. He did a comment over on his Will Hart response page about this post. He thinks you are either getting dumber a or you're in early stage Alzheimer's disease. Maybe Mr. Sanders is losing it?
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