Get Your Hands on the Government's Playbook

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by Simon Black: Don't
Forget to Come Clean: File Your FBAR by June 30th



In this bubblicious
world of trillion dollar deficits, sovereign bailouts, and fiscal
stimulus measures of historical proportions, there is one economist
whose theories and underlying philosophy underpin the foundation
of modern macroeconomics.

His name is
John Maynard Keynes, and his most famous work, The
General Theory of Employment, Interest and Money
has become the playbook from which politicians and central bankers
are making their trillion dollar decisions.

Just about
every politician knows the name Keynes. Most would consider themselves
“Keynesian” in that they believe in government spending
as a means to maintain economic stability. Few have actually read
his book. And yet even fewer realize that Keynes was a major advocate
of Soviet-style central planning.

Among the many
fascist viewpoints in his General Theory, Keynes argued that:

1) A high rate
of interest which encourages saving is bad for society. Consumption
and borrowing must be promoted. In fact, high interest rates are
to blame for why “the world after several millennia of steady
individual saving, is so poor…”

2) Consequently,
the government should make money cheap, controlling interest rates
with a target level of zero. Further, the government should never
deliberately increase rates as inflation will not set in “until
unemployment has completely disappeared.”

3) Even if
inflation should happen to appear, it’s likely due to the “arbitrary
and inequitable distribution of wealth and incomes…” As
such, the better solution to control prices and keep the boom going
is to simply impose high income and death taxes in order to make
a more economically just society.

4) If the boom
starts to fade and low interest rates aren’t doing the job,
it is the role of the government to step in and ‘invest’
obscene amounts of money to stimulate growth. Only the government
is capable of doing this, as “the duty of ordering the current
volume of investment cannot safely be left in private hands.”

5) As Keynes
favored “a somewhat comprehensive socialization of investment,”
he recognized that such complex decisions of investing other people’s
money would be “above the heads of the vast mass of more or
less illiterate voters.”

6) Not to worry,
though, these key decision makers of the state-run economy will
have the right “moral position,” so it’s just a question
of making sure that the right people are directing the economy.

7) In the event
of a crisis, the answer is simple. A government should simply borrow
and spend more. In a 1934 article for Redbook magazine entitled
“Can America Spend Its Way into Recovery,” Keynes opened
with “Why, obviously!”

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