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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Saturday, December 04, 2010

Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, Not the Other Way Around

Please have a look at this video on government spending vs. private investment. Governments, through Keynesian spending programs, purposefully implement policies that reduce investment to increase current consumption. When you reduce investment, though, you reduce income, employment, output and ultimately consumption in the future. Government perversion of economics is a vicious cycle where shifts from investment to consumption has to be done over-and-over. Since markets will adjust to increase savings and investment relative to consumption to counter these government attacks on natural allocations of resources then sometimes we will experience cataclysmic events that will eventually lead to disaster.


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