Brother, Can You Spare A Trillion?

The Economic Stimulus That Wasn't

by IBD Editorials

Economy: Did the hundreds of billions spent to stimulate the economy do the job? And where did all that money go, anyway? A new report crunches the data and finds answers that are devastating for stimulus backers.

Done by Stanford University economists John Cogan and John Taylor and published in Commentary Magazine, the report is blunt in its assessment of President Obama's Keynesian stimulus package: "There was little if any net stimulus."

Worse, say the authors, the White House with its bevy of hip Keynesian-leaning economists should have known it wouldn't work. "The irony," they write, "is that basic economic theory and practical experience predicted this would happen." In other words, the Obama camp should have known better.

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A Critique Of The "Fox News Viewers Are Misinformed" Study

Consumerism Is Keynesianism

by Steven Horwitz

One of the most pernicious and widespread economic fallacies is the belief that consumption is the key to a healthy economy. We hear this idea all the time in the popular press and casual conversation, particularly during economic downturns. People say things like, “Well, if folks would just start buying things again, the economy would pick up” or “If we could only get more money in the hands of consumers, we’d get out of this recession.” This belief in the power of consumption is also what has guided much of economic policy in the last couple of years, with its endless stream of stimulus packages.

This belief is an inheritance of misguided Keynesian thinking. Production, not consumption, is the source of wealth. If we want a healthy economy, we need to create the conditions under which producers can get on with the process of creating wealth for others to consume, and under which households and firms can engage in the saving necessary to finance that production.

Historically it was Keynesianism that brought the emphasis on consumption into economics.  Before the Keynesian revolution the standard belief among economists was that production was the source of demand and that encouraging saving and production was the way to generate economic growth.  This was more or less the correct understanding of Say’s Law of Markets.

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Why the Spending Stimulus Failed

by Michael J. Boskin

President Obama and congressional leaders meeting yesterday confronted calls for four key fiscal decisions: short-run fiscal stimulus, medium-term fiscal consolidation, and long-run tax and entitlement reform. Mr. Obama wants more spending, especially on infrastructure, and higher tax rates on income, capital gains and dividends (by allowing the lower Bush rates to expire). The intellectual and political left argues that the failed $814 billion stimulus in 2009 wasn't big enough, and that spending control any time soon will derail the economy.

But economic theory, history and statistical studies reveal that more taxes and spending are more likely to harm than help the economy. Those who demand spending control and oppose tax hikes hold the intellectual high ground.

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Quantitative Easing Explained

Soros Exposed: Research on the Progressive Puppet Master

by Glenn Beck

“Messianic Fantasies”

- “It is sort of a disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out,” (The Independent, June 3, 1993 “THE BILLIONAIRE WHO BUILT ON CHAOS - GEORGE SOROS.”)

- “I admit that I have always harbored an exaggerated view of my self-importance—to put it bluntly, I fancied myself as some kind of god or an economic reformer like Keynes (each with his General Theory) or, even better, a scientist like Einstein (reflexivity sounds like relativity).” (The Alchemy of Finance, George Soros)

- According to friend Byron Wien (now with the Blackstone Group), “You must understand he thinks he’s been anointed by God to solve insoluble problems. The proof is that he has been so successful at making so much. He therefore thinks he has a responsibility to give money away,” (Time Magazine, Sept 1, 1997)

- “If truth be known, I carried some rather potent messianic fantasies with me from childhood which I felt I had to control, otherwise I might end up in the loony bin. But when I made my way in the world I wanted to indulge myself in my fantasies to the extent that I could afford.” George Soros “Underwriting Democracy: Encouraging Free Enterprise And Democratic Reform Among the Soviets and in Eastern Europe”

- George Soros 60 Minutes Interview – 12/20/98 / Transcript:

KROFT: Are you religious?
Mr. SOROS: No.
KROFT: Do you believe in God?
Mr. SOROS: No.
KROFT: (Voiceover) Soros told us he believes God was created by man, not the other way around, which may be why he thinks he can smooth out the world’s imperfections.

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"A Time for Choosing" by Ronald Reagan

John Maynard Keynes, R.I.P.

by Richard B. McKenzie

The late revered British economist John Maynard Keynes, whose 1936 treatise, The General Theory of Employment, Interest, and Money, changed the way many economists think about recessions, once wrote that “in the long run we’re all dead.” Well, maybe so - for everyone but Keynes.

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