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Tags: Austrian business-cycle theory • Austrian Economics • Henry Hazlitt • Keynes • Saving
Save Us from Government Spending
If you’re a glutton for torment as I am, you watch cable-TV news shows most nights. These days the shows are feeding viewers a steady diet of 100-proof Keynesianism as the cure for our economic woes. Leading in this department is Chris Matthews of MSNBC’s “Hardball.” (I call it “Nerf Ball.” Matthews’s idea of a hardball question for a politician is, “Are you running for president?”) Matthews declared last week, “We’re all Keynesians now,” and each night he pontificates on why the government must start to spend massive amounts of money, even though it doesn’t have massive amounts of money. We’ll worry about the consequences later. Why must it spend? Because we aren’t doing it and that’s putting the economy in recession. Someone has to spend, Matthews says, and the government is spender of last resort.
Read the rest of this week’s TGIF, “Save Us from Government Spending,” here.
Comment by Glenn Jacobs on 14 November 2008:
Great article as usual Sheldon!!Contemporary economists and politicians have outdone Keynes, advocating a perpetual bubble economy driven by monetary inflation and government spending. Not that I am defending his flawed theories, but even Keynes realized that this was unsustainable. In order to stem inflation, Keynes advocated tax hikes during economic upturns to sop up excess liquidity; something that never actually happens. Leaving aside the fact that taxes are collected through coercion and that it is monetary inflation which causes the business cycle, it seems that the economics that is now in vogue is even worse than Keynesianism– a sort of sinister blend of all bad economic thought.
Comment by Sheldon Richman on 14 November 2008:
Thanks, Glenn. There would be no need to stem inflation if the central bank did not create it in the first place. I see no value in tax increases during upturns. Why should people have their money taken from them to counter the effects of the government’s monetary policy? Let the government cut spending instead. If Keynesians have given up the idea of such tax increases, then I would count that as an improvement.