Fred: Keynes proposed that everyone would have a job if the government would print more money and distribute it widely.
Mike: Distribute it to me, and I wouldn't have to work.
A lost recording, England 1932:
Keynes: There must be a way to end this depression. Along the way, we can show that government can be good, and business is bad.
Assistant: How to do it?
Keynes: I have it! There is not enough demand for goods and services. Something changed, and people stopped wanting enough stuff. They became suddenly and disastrously frugal, and no longer want to buy things.
Assistant: With a raise, I would buy more things.
Keynes: Forget the raise. If only we could find Martians who would buy more of our stuff, then people would work for the Martians. The increased demand would get money flowing, like a river, and we would all be rich.
Assistant: Sir, we had a long talk about the Martians. We have gone over that.
Keynes: OK, yes, no Martians. Where else can we get demand?
Assistant: How about the French and Germans?
Keynes: They are not rich enough. They are still progessing toward wealth through adaptation to Socialism, and they haven't yet adapted. They have this stupid notion that they should sell more of their stuff to us, not buy more stuff from us.
Assistant: If you and I both had more money, we could buy things and help to raise demand.
Keynes: More money? Eureka! The government can print up the stuff and spread it around. And, I can get more money by advising the government. The workers will chase those pieces of paper like catnip. They will become used to working again, instead of being lazy and stupid.
Assistant: More people may find work. But Sir, the value of money will fall and prices will go up. Everyone now working and saving will be silently taxed to employ those extra people. And, what will happen when the stimulus stops?
Keynes: First, we and our friends in government will all have more money. That has to be a very good thing. Second, in the long run we are all dead. Forget about tomorrow, it is in the future.
Assistant: So, I get my raise?
Use Inflation to Fool People
Keynesian economists expect most people to be slow-witted and unable to make rational economic decisions. The government tries to fool people into working harder by inflating the currency to just the right amount. But, it doesn't work for long.
"Keynesian Economics" in The Political Dictionary
Understand politics by knowing the meanings of things.
Econ 201: The Myth of the Economic Multiplier
You don't create $40 in wealth by paying $10 to mow your lawn.
The Deadweight Loss of Taxes
Collecting $1 in extra tax kills $2 in production.
A Short Argument Against Stimulus
It isn't so stimulating when you know that it must be paid back.
Let's Counterfeit Our Way to Wealth
If Obama and Keynes are correct, that there is a 1.5 wealth multiplier on spending, then $100 in spending produces $150 in wealth, and we should all benefit from counterfeiting. It is not my fault that the belief in a multiplier is so outrageous that it leads to this outrageous result.