The demi-god of liberal economics is John Maynard Keynes. He is a most interesting character. And character is an accurate description. He was born in England in 1883 into an upper class family. He had a superior education in British public schools (which are actually private schools) before going to Eton. From there he went on to Kings College, Cambridge. Ultimately he became Baron Keynes.
Keynes was an elitist. He believed it was the obligation of the upper classes to control the country almost as an Oligarchy. Since they had a royal family he could not push the issue quite that far. He certainly felt that the under classes were not capable of understanding the intricacies of business and government. They were there to do the menial labor allowing the elite the freedom to do those things that they deemed important to continuing the "British Way of Life".
As his father was an economist before him, he was steeped in economic philosophy throughout his early years. So ultimately his theories became known as Keynesian Economics. To explain Keynesian theory briefly it is that governments are the controlling factor in economics. In the face of an economic downturn it is the obligation of the government to spend large sum and even go into deficit spending to turn the economic picture around.
That may even make some sense under certain situations and with certain restraints. It has stopped making sense for America two years or more ago. There are two main points why Keynesian theory does more harm than good in this country today. The first is that at the juncture of the Bush administration and the Obama administration the country was already enormously in debt. This was not because anyone was trying to prevent a recession. It was because we elect politicians that cannot restrain themselves from spending other peoples money.
Of course there are three ways that the government gets money. They can print it. They can borrow it. Or they can impose taxes on people and businesses. If they print it, every dollar in the world is worth a little less on world money markets for every dollar printed. You may have noticed the price of food has gone up. Why does this happen in a recession. Because they have been printing dollars they are worth less against foreign currencies so it takes more of them to buy products. Especially imported products.
If they borrow it, it has to get paid back with interest. That indebtedness will cripple future generations and harm the necessary functions of government, such as the military. It is this borrowed money that the government is shoveling out in large amounts to speculative businesses that will possibly lose it altogether such as with Solyndra. But the money and the interest still must be paid by American taxpayer in future generations yet unborn. Today's politicians are wrecking the financial future of your grandchildren and your children's grandchildren unless they are stopped.
Now we're back to taxes. Governments favorite way to steal from the producers of the country. This again is a stupid tactic. Smart people, good business people sometimes get rich. But they get rich by producing. Bill Gates got very rich with Microsoft. But he and his company also made a lot of other people very rich. And it also opened enormous opportunity to those that were merely very successful. George Clooney got very rich acting, but not too many others shared in that success. Entertainment stars and sports stars, as much as we love them, are not producers. Producers start companies and make products. Taxes on producers stifle progress and prosperity.
So shun Mr. Keynes, who, by the way, didn't believe in raising taxes in a downturn. Get out of the way of the producers of this country and stand back to see how fast we can recover from this very ugly mess that we are in right now. Preserve America!