On Keynesian Economics and Obama Socialism

Tuesday, June 2, 2009

My comment on the "Young Cons Manifesto" video on youtube was:

John Galt would be pleased with this : ) Socialism has never and will never work. If you don't allow people to work hard and be rewarded for their ideas and effort, the system will always fail. I think more people need to be educated about supply side versus Keynesian economics. Democrats don't understand that over taxing the people who can actually produce, hire, and buy hurts the economy!

It was responded to by "lieinveigleobfuscate" who said:
Socialism = strawman. What Obama is doing is pure keynesian stimulus. BTW, supply side economics is disproven econometrically, and by the past 8 years.

My counter-response was:
lieinveigleobfuscate, you certainly live up to your name.

Socialism = centralized economic planning, government takeover of corporations, high taxes, media censorship, "closed room" deals, healthcare rationing, eugenics, blind following totalitarian charismatic leaders, rewarding favors with government jobs, empty party lines and promises, destroying the so-called establishment and middle and upper classes... does any of this sound familiar to you? They are all part of our current political events ever since Obama entered office. How is conservative talk radio censorship, criticizing the USA in foreign countries, funding abortions in Mexico and taking over General Motors Keynesian economics?

Keynes’ ideas have failed our country again and again. They brought us double-digit unemployment and inflation even worse than we have today in the 1970s. Keynes ideas gave us a 92% marginal income tax rate and convinced generations of the false idea that you can stimulate an economy by taking money from the people that make things and giving to those that don’t. Supply-side economics was the only thing that brought us out of that mess by slashing government spending and taxes and encouraging employers to create more jobs and products. Interest rates and inflation fell to historical lows, the economy soared, strikes and race riots vanished and the Berlin wall came down. This Regan-era boom carried us through the next two decades until we got complacent and forgot how the economy works. Our flirting with Keynesian ideas in the last several years has brought this Carter-era calamity back on us.

The simple fact of the matter is that the more you take of people’s earnings, the less motivation they have to earn money. The less they earn, the less the government collects in taxes to fund their programs that also do not earn any money. If you then follow Keynesian economics and raise taxes, you further this cycle and the economy shrinks, unemployment rises. If you follow the other Keynesian idea and spend money the government doesn’t really have, you raise inflation and make people’s money worth less. It makes much more sense for the government to cut its own spending in times of economic downturn, thereby giving the public more money to spend in the economy and companies more money to solve their economic problems.

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