Big Government Is Not Stimulus: Why Keynes Was Wrong (The Condensed Version)

The CF&P Foundation has released a condensed version of our successful mini-documentary explaining why so-called stimulus schemes do not work. Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

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  News & Politics

[Ronald Reaganomics]

Final claims are false: Stimulus was done in 2008, the economy is back on its feet. Please learn to interpret statistics. No stimulus works the next day, and in fact this one worked faster than expected. Also, Japan's new stimulus is expected to work just fine, because they are targeting domestic projects, unlike last time.

[Ronald Reaganomics]

Fourth claim is false: One, WWII created necessity for industry, fueled by stimulus, provided by Keynesian economics which boosted the economy. Remember war-bonds? That was a nice trend, and it really helped. Wouldn't have worked if no stimulus.

[Ronald Reaganomics]

Third claims are wrong: Please learn how to use statistics before attempting to use them. One, Keynesian economics worked for FDR, bringing America into the 50's, remember how amazing that time was? Yeah, that's Keynesian. Two, Herbert Hoover's economic policies did not cause the dip, the depression did. You can look up why exactly that happened, was a cog, in simple terms, thanks to classical economics which is known for having rise and crash patterns.

[Ronald Reaganomics]

Second claim is utterly wrong: Look at first claim. Also, borrowing money is not a bad thing. Aggregate wealth is created by borrowing, with interest, and then using tax revenue to support domestic industries. Real world evidence proves Keynesian is a success, look at the Great Depression, then look at the 1970's oil crisis after which Keynesian was replaced. Since we abandoned Keynesian our deficit has shot up, our debt, and the economy has lost a lot of value.

[Ronald Reaganomics]

First claim is wrong: Gov's do not take money from the economy, they get it through taxes. Gov does not borrow money, it targets its tax revenue to domestic infrastructure projects (for example) to boost industries in the economy, hence giving money back to consumers buy also putting the consumers to work so they can consume.

[Ken Smith]

I wouldn't even call it abusing the idea when deficit spending is done in good times. Back during the run up to the bubble and crash we had in 2008, the deficit spending was being done for no other reason than those is power wanted to spend and also wanted to cut taxes and just went ahead and did so even though it was clearly not what Keynes would have suggested be done in that environment. 2 wars and medicare part D were all unpaid for. The wars were kept off the books to hide the spending.

[ainu waka]

And btw, decreasing taxes is also Keynesian. dumbass

[ainu waka]

This guy is totally misrepresenting Keynesian economics. If you're talking about using only fiscal policy to boost growth during a recession/depression, it works. In a recession, no business would increase spending. In fact they save more. This isn't good for the economy. the government therefore takes this 'unused' money to boost demand. Keynesian economics make sense during a recession. Its when government abuses it during good times does it cause problems.

[5994fps]

Try talking to almost any economic student. They know nothing except Keynesianism.

[Daniel Ocampo]

Also, to comment on Bush's spending is misleading, because it was in the form of irresponsible defence spending and a rise in healthcare spending, both of which obviously have no 'pump-priming' effect.