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

[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.

[Daniel Ocampo]

To label it 'big government' is just a failure to understand what Keynes was actually saying. All he insisted is the lack of consumption in the economy during a depression could be supported by some external force, in the form of the government.

[Daniel Ocampo]

This guy doesn't understand that raising taxes and protectionism are both examples of fiscal non-stimulus, to coin the term.

[gwynedd1]

Government creates money by borrowing. Debt is money and money is debt. Its little green blips made on computer key boards. What is he talking about? Why not make enough little green blips to employ people to do work? We need 25% of the population not working to save little green blips? Its a fiat currency. Japan's national debt means nothing. They own their own debt. If the central bank owned the debt , its fake debt. What a mess of a vid.

[gwynedd1]

Governments make roads, sewers and manage other natural monopolies. We would certainly not fair better with private natural monopolies. You are also likely unaware, as are most people, that fiscal policy is not just about spending. Deficits created from tax cuts increase money supply outside the bank credit system. In other words, when banks are not lending, the only monetary stimulus is a deficit one way or another. Since I am conservative, generally I like tax cuts.

[gwynedd1]

Its even worse. In Keynes time government debt was a fungible exchange unit while also a means to increase circulation of cash hoards. However now government debt is the entire money supply. The only new money can come from government debt when banks are not loaning . Banks suck anyway since they only loan against assets they can foreclose on. They don't make productive loans. We are in a fully state money system making this video complete folly. Modern Money Theory is how it works now.