Keynesian Economics, and Why It Fails

Keynesian economics. You’ve probably heard the phrase before; it’s usually touted by liberals as the ultimate example of perfected economic policy. My college professor explained that Keynesian economics is the idea that the government should spend extra money when the economy is down in order to stimulate it, then cut back on spending when the economy is good. FDR used this model with his New Deal programs, as has the current president with his 2009 Stimulus Program (though both without ever cutting back on spending).

Well my 18-year-old brain was essentially mush at the time I entered college–not completely, but just about. I bought this ideology hook, line, and sinker…then. Now after 4 years of my own study in the school of common sense I’ve realized that my beloved college professor left half the story out of the lecture. The only way that government has any money is by taking it out of the private sector with the down economy, thereby making the problem worse. Certainly large government picks and chooses who gets the money as it sees fit, but it cannot produce more money–only a thriving private sector can do that.

With all this talk of governments spending money, Keynesian economics begins to sound very much like redistribution of wealth (see theft). Well here’s the bombshell:  it is. Keynesian economics follows the same idea that the government knows how best to spend money, and if it can only spend enough it will eventually stimulate a struggling economy. The big problem is that government spending has the exact opposite effect, dragging a slow economy into a worse and worse state. So it really doesn’t matter if you call it Keynesian, or redistribution, or Marxism–they all have the same economically destructive effect.

How to Talk to a Liberal: Redistribution of Wealth

Living in California most of my life has given me the opportunity to witness liberalism first hand in some of the most tragic ways. High taxes, manipulative policies, special favors for illegal aliens–you name it, we’ve got it. Liberals have left no stone unturned in finding new ways to legislate, regulate, and utterly ruin the lives of the average citizen every time they come in contact with a government run entity.

You’d think I’d one day get used to this kind of ideology–but no! California liberals never cease to amaze me at how ready they are to take your money and spend it on foolish, fraud filled programs. Take Chad for instance (real name withheld for privacy concerns). Chad believes that middle class families should be paying for his life as a college student. Their money should be taken from them and redistributed to those who do not make as much, if any at all.

This is all well and good if you’re Chad the starving college student who never worked a 40 hour week in his life. However, the best way to respond to this liberal (Marxist) nonsense is to set up the scenario in terms that he can understand. What if Chad got an assignment from his liberal college professor, and he worked REALLY hard on it for weeks on end to get it done. And what if Chad turned in the assignment and got an A, but when the teacher handed it back he said, “Chad, I know you got an A on this assignment, but I don’t think that it’s fair to the other people that didn’t work as hard and got lower grades. I think we’re going to have spread your grade around and just have everyone get a C.”

How does redistribution feel now Chad? Not so good when you’re the one having the earnings from YOUR hard work taken from you, does it? The way I always look at this Marxist ideology is not via the myth of taking from the rich and giving to the poor, but by looking at redistribution of wealth as what it really is:  theft.

Great Tweets from the #AuditTheIRS Tea Party Rally!

Where Did Occupy Wall Street Come From?

Many of us probably wondered where groups like Occupy Wall Street got their ideas and tenants that they were supposedly fighting for.  One place can be found right in your junior college classroom, in a gem of book called “A People’s History of the United States” by Howard Zinn, or as I affectionately call it “The Second Communist Manifesto.”  Below is an updated version of one of my college essays done in response the book in an attempt to draw a correlation between Zinn’s ideology and that of OWS.

Zinn’s thesis is to tell history from the point of view that is against pro-capitalist governments.  He believes that capitalism is the root of America’s problems, that these governments should be overthrown by a bloody revolution, and that they should be replaced with communist societies.  Contrastingly, excessive regulation on the free market, over-printing of money, high taxes, and increasing national debt due to excessive spending by the government are only a few of the alternative sources for America’s economic problems. 

While some groups may think that they are ready for Zinn’s solution (i.e. Occupy Wall Street), the majority of American’s believe that capitalism is still the economic structure that should be used and that the government should stop abusing it (i.e. The Tea Party).  Now when I first read this thesis I thought that the U.S. military would be a daunting force deterring such a bloody revolution as Zinn advocates.  However, there was a great deal of violence that took place at the Occupy Wall Street protests and to my knowledge little to no action took place in response.  Obviously, they did not reach the level of violence that Zinn called for, but I wonder how far OWS could have gone without receiving severe remedial action.  Howard Zinn (and OWS for that matter) would not be strictly Marxist if they did not advocate in favor of violence, thus they cannot peacefully protest without deviating from their ideology.

According to Zinn, “incentives of cooperation” are natural human desires.”  He believes that human nature is basically good and that it is the economic and governmental structures that bring about the evil.  This line of thinking is severely flawed since humans create these structures.  His view of human nature comes into play in specifically in reference his anticipated result of his bloody revolution.  He states that his bloody revolution will usher in “a new culture of sharing, of respect, a new joy in the collaboration of people to help themselves and one another.”  In reality, the countries that experience communist societies have resulted in the wealth of a small elite and a miserably poor existence for the rest of the society.

I find it particularly interesting that the exact verbiage used by Occupy Wall Street is in Zinn’s 23rd chapter.  “One percent of the nation owns a third of the wealth […]. This is possible because the more of the 99 percent that begin to see themselves as sharing needs, the more the guards and the prisoners see their common interest, the more the Establishment [capitalist government] becomes isolated, ineffectual.”