Redneck Review!
No. 126 - 9/18/17
Some claims have been made in recent reviews, like the last one, which definitely would not be considered "politically correct" in elite circles today! One claim, clearly stated that "Keynesian theory is basically flawed."  A dangerous assertion to make in view of the fact that Keynes is revered around the world today, and is accepted by a large majority of officials at the government and big bank level, and is dominant in a majority of today's
colleges and universities. It is repeated here that it is one of the reasons we have been accumulating huge and not repayable national debt over the past several decades.  
That claim here repeated is that Keynes call for government and bank increases in the money supply, called "quantitative easing," to combat recession periods, is used without hesitation, because, first it works!  Imagine what would happen in any little American town if a large plane would fly over and drop millions of dollars of $100 dollar bills, available for the taking by anyone lucky enough to grab several handfuls!  Prices of land, homes, automobiles would immediately go up, as demand, fueled by people's sudden ability to buy, would put pressure on everything in the area for sale!  And that, review readers, is exactly what has driven our stock market to record breaking new levels!  Low and near zero interest rates, and super easy credit is and has been the driving force there!  And is precisely why we are warned that not only the national debt, but that business debt and consumer debt is also at record levels.  And we dare not forget that the public is happy with the system, at least while the economy is buzzing and investors are happy!
But the flip side of the Keynes system is the problem, as human nature itself explains why the theoretical clamp down on an over-heated economy, recognized by the ogre inflation, does not happen!  Logically and historically, people in a democratic society simply will not stand for it!  You can see the evidence in the news daily, as every little attempt by officials to slow the economy by raising interest rates, or to cut spending in order to bring costs
more under control is met at all levels by howls of protest!
This brings us to the second and more basic reason for the debt hinted at and quoted here at the end of Review 125: "Human nature itself is an even more basic cause" both of the big debt and the reason Keynes is doomed to fail!  
First, common sense and a casual understanding of human nature tells us that we all prefer easier conditions than hard ones!  Do we not all willingly accept increases in pay or income more readily than decreases?  Are we all not happier with gifts and grants than we are with increased taxes to pay for them?  Is it not a human tendency to sit back and accept without blushing gifts and handouts which we know we have really not paid entirely for?  Are we unhappy when we are told that our federal government pours more into our
Idaho economy annually than we pay in turn for federal taxes? Really, is it at all surprising that some 45 million Americans today are helped out with food stamps?  Would either you or myself turn down such help if times were tough on ourselves and our families?  Finally, is it not true, that most of us will accept something given free if continually offered us?  And is it therefore surprising that to pay for such largess, government must borrow on the future?
As discussed at length in reviews 14 to17, was Frederik Bastiat in his book THE LAW not prophetic when he claimed around 1850 that government gifts taken from some to give to others was LEGAL PLUNDER and was doomed to fail? Or was not Alexander Tyler in 1787 not correct when he said that democracies would always collapse from bankruptcy as they  normally elect officials who would buy their votes with handouts?
Jake Wren

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