Are Keynesians Really That Stupid?
I got the idea to write this blog post after reading TMFDeej's post entitled "How Uncle Sam is killing your savings".
Keynesians say things like "The government has little choice" and "Without bailing out the banks our economy would have collapsed" as if the government MAKES economies. They don't. Governments don't have to set interest rates OR use fiat currencies. They could just stop printing money and stop setting interest rates then let the market determine what the value of money is and where interest rates should be set.
Yes, it's true that due to 70 years of gov't intervention in the markets, the next 12 - 24 months would see a massive recession, but once the malinvestments the gov't created are gone we would once again experience real, sustainable growth.
Lets not forget, the reason the "Great Depression" was called such was NOT due to its severity, but its length. The 1921 recession was just as severe, but the gov't stayed away and it lasted 12 months. We are now experiencing 2 years of this recession with the only growth coming from inflation. The fact that the FED has poured well over $3 Trillion into a $15 Trillion economy and we're hoping to see 1% growth is hard to fathom that anyone with a degree in economics can call that a recovery.
The problem with Keynesians is they believe their are methods to make bad things magically go away. If we can just infuse trillions of dollars into an economy then pull it out at just the right time, we can live a hedonistic Roman lifestyle with no consequences.
But my BIGGEST problem with Keynesians is when they try to act like free market capitalists. They are not - they are Socialists and sometimes Fascists and Communists. They may have been brainwashed to believe they are capitalists and will make arguments like George W Bush's stupid quote "I've abandoned free market principles to save the free market system"
Are Keynesians really that stupid - or is the end plan to trick enough of us to create a massively dependent working class that kneels at the nipples of government handouts?