ELDER PATRIOT – The government released its adjusted first quarter GDP analysis today. After running up an additional $9 Trillion in debt over only the past 6 years, allegedly “priming the economy’s pump,” economic activity declined by .07% in 2015. An indictment of Keynesian economic theory if ever there was one.
I’ve long contended that Keynesian economics is a fallacious concept developed solely to support the specious policies of big spending bureaucrats and politicians. It doesn’t take a genius to know that when you find yourself in a hole the best thing to do is to stop shoveling. Likewise, it shouldn’t require an economics degree to know when you’re in an economic crisis it’s time to stop spending.
When pressed on the long-term debt problems that accompany his economic theory, Keynes replied, “in the long run we’re all dead.” The implication for the politician embracing Keynes’ theories maintaining some level of economic stability during his tenure in exchange for passing to his successor a steeper level of economic pain than would otherwise have been necessary.
For the man on the street that supported the Keynesian politician, he’ll remember him as having used every financial tool at his disposal to maintain some positive level of economic activity. He will be remembered as a true champion of the people. Unfortunately, in his ignorance, the man on the street is unaware that the additional debt only made the economic decline that much deeper when the reckoning could no longer be artificially delayed. The subsequent office holders who get stuck cleaning up the mess take the blame.
Our great Founder, Thomas Jefferson warned us, “by what road it (our nation) will pass to destruction, to wit: by consolidation of power first, and then corruption, its necessary consequence.” Almost 189 years after his death, Jefferson has proven as sage as ever.
Supported by the mainstream media’s cacophony, “too big to fail,” and the subsequent Dodd–Frank Wall Street Reform and Consumer Protection Act, economic power was consolidated in mega corporations. What of the corruption that Jefferson warned us was certain to follow?
The “grease” for lubricating the gears meshing the growth of the unholy relationship between mega corporations and politicians came from borrowing $9 Trillion under the guise of saving the economy. This was money we did not have but we eagerly agreed to borrow in our collective ignorance. All of this was sold to us in accordance with the economic principles of John Maynard Keynes.
When the reigns of power pass in 2016 it would be wise to recollect more of Jefferson’s wisdom, “that government is best which governs the least, because its people discipline themselves.”