Guest Post by Martin Armstrong
John Maynard Keynes in his 1936 book, ‘The General Theory of Employment, Interest and Money,” argued aggregate demand was too volatile to be stable and would lead to inflation or recessions. His theory honed in on spending as a means of price control. Low aggregate demand, Keynes argues, would lead to high unemployment and stagflation. Government could intervene through fiscal policies to increase aggregate demand, as an example, increased government spending could tame inflation. Interest rates, according to Keynes, could also be modified to encourage spending and stimulate demand. So why are these theories failing miserably today?
To begin, the United States had a balanced budget when Keynes presented his theory. The government is now the biggest borrower, acting in its own self interest under Adam Smith’s theory of the invisible hand that Keynes spent his career attempting to deny. According to Keynes, “there is no self-correcting mechanism in a free market economy that automatically restores full employment.” He believed that the government could change the business cycle but arguably regretted this notion on his deathbed.
Keynesian economics gave the government the green light to manipulate the economy, or at least make numerous failed attempted to do so. There is that old joke about communism that you can vote your way in but must shoot your way out, seemingly fitting to the utter disaster governments have created in regards to our economic situation.
The government is by far the biggest borrower. Raising interest rates can have no impact on demand, as the government will simply borrow more, and the central banks simply have no say. During the Great Depression, for example, Washington forced the Federal Reserve to implement QE policies to artificially lower rates to increase demand. Yet, when Washington ordered the Federal Reserve to do the same during the Korean War in 1951, the central bank first broke with Washinton and refused to comply as it knew it would hurt the economy as America’s budget was no longer balanced.
Quantitative Easing destroyed the Keynesian model, and there is now no other alternative for central banks to control the economy. If they raise rates, the budget explodes. The Keynesians advocate manipulating demand and advocate fiscal spending that the central bank cannot control. However, the other part of Keynesianism is the manipulation of taxes. Keynes argued that to stimulate demand, you lower taxes. He saw this correctly, but again, it does not fit with government agendas.
There is no limit to what the government will spend with “money” that simply does not exist. Governments continue to borrow perpetually with no real intention of paying back their debts. This is one piece of the Sovereign Debt Crisis that will implode like a nuclear bomb the likes of which we have never witnessed. The business cycle cannot be manipulated, and what’s more, the Keynesian model cannot account for declining confidence in both government and the economy.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
You cannot have something for nothing. An economy based on that cannot continue to function, collapse is inevitable.
When you can be flown-in. And ALL expenses paid. For Nothing.
All I had to do was promise to vote.
Struggled to remember…D? R? R? D?
” No hay problema de todos modos”
” 没问题，都一样”
” No problem all the same”
she said.
In my view Keynes model was brought in by helicopter Ben as the final death knell. As always I don’t think this was coincidence and was done on purpose under the Obummer regime. Hayek and his Austrian school seem like a much more common sense approach to dealing with business cycles and debt. Instead, we got throw money at the problem and zirp. I think they knew it would be a failure.
Your “view” is myopic.
“Your “view” is myopic.”
Lucky for Us, We have Fort Knox!
Good fuckin’ luck with that, you easily lied to fool.
Got the Slow-on-the-uptake one of Yinz. 1:6 odds
Because the ideations of degenerate will be, a priori, degenerate.
“year by year Germany must be kept impoverished and her children starved and crippled”
Keynes became an informal reparations adviser to the German government, wrote one of the major German reparation notes, and supported the hyperinflation on political grounds.
And naturally, as a result of his enlightened position towards Germany, after the outbreak of the Second World War (sic) Keynes was offered a directorship of a major “British” Bank.
Indeed.
Furthermore he wrote-
Treatise on Money, was published in 1930 in two volumes. A central idea of the work was that if the amount of money being saved exceeds the amount being invested – which can happen if interest rates are too high – then unemployment will rise. This is in part a result of people not wanting to spend too high a proportion of what employers pay out, making it difficult, in aggregate, for employers to make a profit.
It is also- in part- that by saving rather than living in a constant state of near poverty, people might pursue their own interests and those of their family rather than being employees of someone else who want to profit from their labor.
He believed that budget deficits during recessions were a good thing…
There is of course so much more that this damaged psyche came up with that has led to our current predicament
Would this surprise anyone?
Keynes’s early romantic and sexual relationships were exclusively with men. Keynes was open about his affairs, and from 1901 to 1915 kept separate diaries in which he tabulated his many sexual encounters…
Of course this is nonsense, how could his sodomite lifestyle impact his views on economics? Here, let the experts over at Wikipedia correct that mistaken notion once and for all-
Political opponents have used Keynes’s sexuality to attack his academic work. One line of attack held that he was uninterested in the long-term ramifications of his theories because he had no children.
It’s all so tiresome, isn’t it?
Yep. Keynes was evil faggot degenerate. Evil only knows how to destroy. Keynesian BS economics has destroyed for 90+ years.
Enjoyed your comment hsf, makes one wonder why homosexuals have such a keen interest in destruction.
With all your travels as a comic, have you ever seen a content or happy with life homosexual, man or woman? Not condemning their choice, but they can not seem to understand that it is their choice and it brings such unsatisfactory results.
“ramifications”
https://www.usdebtclock.org/
This is fine.
So why are these theories failing miserably today?
To begin, the United States had a balanced budget when Keynes presented his theory.
He believed that the government could change the business cycle but arguably regretted this notion on his deathbed.
Quantitative Easing destroyed the Keynesian model, and there is now no other alternative for central banks to control the economy.
The other part of Keynes ” not that there’s anything wrong with that”
https://www.independent.co.uk/news/business/analysis-and-features/john-maynard-keynes-new-biography-reveals-shocking-details-about-the-economist-s-sex-life-10101971.html
Why? Because it was always full of shit! “Fractional Reserve” is fucking FRAUD! The entire system is built on a LIE.
We turned our backs on God.
We turned our backs on our wisest men…like Adam Smith.
We embraced our love of mammon.
The rest, as they say, is history.
From where do you get this “we” shit, kemo sabe?
OK…YOU mother fuckers! happy now?
The attempts over the decades to ‘refine’ economic theories into a ‘science’ mirror the attempts to produce a unifying theory of the stock market that allows he who possesses it to play the market like an instrument rather than like a roulette wheel.
The feebs claiming success on the economic theory side- Keynes- for example, are a little more respectable than those on the market side- Ted Warren- for example, but feebs they all still are- Paul Krugman- for example.
Economics is an art. It has some science to it, and will, has, become more scientific over time, but remains and will remain, like medicine, an art at bottom.
Economics is pure animal behavior.
It is driven by desire, hunger, herd mentality and every so often, when spooked, there’s a stampede.
The idea that it can be controlled is akin to that scene in Animal House-
Keynes is fraudulent celebrity jewish academic #6355 pushing a fake idea that suits the ruling classes