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Keynesian Economics Is Wrong: Bigger Gov't Is Not Stimulus

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Uploaded by on Dec 15, 2008

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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  • When they show unemployment at 17.2% during the 30s at 4 47 they fail to mention that it fell from 25% when Roosevelt took office to 2% when he left, and for those who say it was all word war 2, it had already fallen significantly by that time. By taxing the upper class higher than than the rest of the country and spending that money on public works projects, jobs are created and the middle class grows. Also, remember that every time government deregulates the banks, they collapse the economy.

  • Why do politicians keep using it? Because they know it works. However, what they don't do is run surpluses when the economy's booming. Who wants to dampen a boom? So they really have only been half-following Keynes. This man assumes that all money is being spent or invested, that the gov't can only get money by taking money from someone who otherwise would have spent it. But people and corporations can and do hoard, or reduce their debt. Not spend. That's when the gov't should spend, like now.

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  • WW2 is the greatest example of Keynesian economics with 100% employment

  • @magicidiot12345 To some extent it creates soldier jobs. But most of the soldiers were living in the US before, where they would spend their pay. It doesn't create wealth. In general spending on the military does not create wealth.

  • @keepaopenmind

    it creates soldier jobs

  • @metsfanshea07 - These "jobs" do not produce true wealth at a greater rate than what the private sector alone would allow. Resources are allocated on the basis of political pull rather than consumer demand.

  • @magicidiot12345 I doubt that it helps the economy very much, except for those who directly get the trillions, such as Haliburton and GE. It certainly doesn't help the economy as much as spending on wealth producing projects in the US. Is it part of the "Austrian school" of economics to believe spending overseas helps the domestic economy?

    Ron Paul 2012!

  • @keepaopenmind

    Because spending trillions of dollars overseas helps the economy

  • @keepaopenmind Corruption and chaos are more fervent in the most regulated areas of the economy. The financial and housing arenas of business are the most heavily regulated, so to say that this is the fault of free markets is absurd. It is quite evident that the opposite is true.

  • @dtmoura I want to apologize, dtmoura, I was wrong. Ron Paul does have a chance, a good chance. He may be our last best hope for Constitutional government.

  • @nes4me I've taken plenty of economics courses.. I'm not saying regulation is the way to fix the economy. I'm saying lack of regulation, auditor negligence, and Greenspan being asleep is what caused the meltdown. I'm saying that the way to get out this mess is to try and achieve full employment. The way to do that is increase aggregate spending. Austerity is exactly wrong. Keynes was an economic genius because he was willing to admit the classical theory wasn't general enough. Ron Paul 2012!

  • @keepaopenmind Pal, we have never had a free market so don't go trying to say that more regulation is the way to fix a market that your previous regulations messed up to begin with. You should take an intro to economics class before you start talking about Keynes like he's a genius. He offered a convenient idea to fill the void that governments were looking for.

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