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Great Economic News


Americans Reject Keynesian Economics

According to a recent Rasmussen survey;

59% think Keynes had it backwards and that increasing the deficit at this time would hurt the economy rather than help.

In fact, only 11% think that the US should increase deficits right now. A full 70%, think it’s time to cut the deficit!

I think that is great news simply because Keynesian economics has been used by both parties as a way to justify their ever increasing lust for government spending.

Rejection of Keynesian economics is found across demographic and partisan lines. Republicans and those not affiliated with either major party overwhelmingly reject the notion that increasing the deficit is the right prescription in difficult economic times. Among Democrats, 21% agree with the Keynesian approach, and 47% do not.

I think the reason for that is clear. Most Democrats simply love the idea of a big government that is there to “help” when the times are tough. While I agree to a certain extent, I think the politicians have taken it way too far. There is a fine line that must be looked at, the difference between helping a person and making them dependent. I think the kind of programs we have now, make the populace ever more dependent on government for various different things. What happens if the government goes belly up? How many people are going to royally screwed, when the government can’t meet it’s Social Security obligations? Baby boomers are not getting older and they are going to want some of that money that have paid into the system back. The same money that has already been spent by profligate politicians of both parties. Of course dependent people make for reliable voters.

I’m glad American are rejecting Keynes because Keynes is the major contributor to the notion of “spend our way to prosperity” that the politicians are trying to push on the American people. You can’t spend your way to wealth. Every child in America knows this, it’s sad that it takes a college education to unlearn a simple truth. Over indulgent and profligate spending led us to the precipice we are at now. More spending will not get us out of it. Of all the bad things Nixon ever did, this was the absolute worst; “We’re all Keynesians now.” Don’t ever forget that Nixon’s policies of price fixing led us directly to the Stagflation of the 70’s. No it wasn’t all Carter’s fault, but his inept leadership didn’t exactly help matters. I do give Carter credit for bringing in Volcker at the Fed.

What I’m really happy about, is that hopefully more Americans will discover the Austrian School of economics. The Mises Institute is a great place to learn about Austrian Business Cycle Theory (ABCT). Everyone should go watch the Keynes vs Hayek Rap. If anyone wants any ebooks on Austrian Econ, let me know. They are free for everyone who wants to learn.

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  1. yttik
    February 6, 2010 at 17:57

    That’s fascinating, Zombie. I was trying to figure out where Obama’s SOTU bounce went because he’s back to -15 already. I wonder if it might have something to do with people’s rejection of Keynesian economics?

    I think economics is becoming simple for people to understand.

  2. February 7, 2010 at 22:58

    Econ is simple. It’s all about Human Action. Once you understand the concept of incentives and how people will rationally act in a way to maximize their amount of “stuff” everything should logically fall into place. That’s Austrian Economics as taught by Hayek, Mises, and Kirzner.
    The one’s that are trying to make it difficult (Keynesians) are doing it so the average person will just throw their hands up and let the “experts” handle it. You see how well that has worked out.

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