Pt. 6: Government Spending Multiplier Destroyed, Factoring-out Dilemma

The Free Enterprise Cartoon Bears attack the government spending multiplier (fiscal multiplier or income multiplier), show the absurdities of the Keynesian logic error about multipliers, and demonstrate the "factoring out dilemma" faced by Keynesians.

Part of Fiscal Multiplier Debunked and Destroyed series.

Made with Xtranormal State

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1) The Keynesian Theory
http://www.cliffsnotes.com/study_guide/The-Keynesian-Theory.topicArticleId-97...

2) ECON 110 Open Economy Multiplier Derivation
St. Charles Community College
http://www.stchas.edu/faculty/gbowling/macro/OpenEconomyMultiplierDerivation....

3) Derivation of the Formula for the Simple Keynesian Multiplier
http://pages.towson.edu/jpomy/kmultiplier.html

4) Aggregate Demand Video Tutorial
http://www.youtube.com/watch?v=L7ptmu6eZ1U&feature=related

5) AE3 Aggregate Expenditures Algebra Keynes
http://www.youtube.com/watch?v=fpy2_2xIaG8

[This one evades the "factoring-out dilemma" by not identifying which is total income, and which is disposable income. And repeats Keynes' original logic error, claiming that something "spectacular" will happen when government increases spending. The "spectacular" thing that happens, is actually that national debt increases by the amount of government spending, or govt sucks that amount of money from the private sector and wastes some of it ;) ]

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[MrTugwit]

@ninamaggie If you are interested, I'm just about to put up the first part of another one, Part 12a, to destroy the 1/(1-b(1-t)) multiplier :)

[ninamaggie]

nice