Over almost a century Bastardized Keynesian Theory has become the Wmap of public spending policy; it has become the dark energy behind our ever expanding national debt, and is at the heart of our current economic malaise.Politicians of both parties point to Keynesian Theory as validation for their spending policies and each claim an investment return on these debt funded policies. This occurs locally, on the state level, and nationally. Has there been a spending project on any of these levels of governance that the proponents of which have not pointed to the investment benefits of as justification for their spending? Whether it is a trolley across a mile and a half of Charlotte NC or high speed rail lines across states, they argue it means jobs and dollars that, as Brad Miller states "ripple across the economy". Conservatives and Liberals are both guilty. Conservatives spent like drunken sailors under 6 years of Bush, but not to be out done, liberals subsequently spent like crack addicted junkies. All the while, each party argued that they were "investing" Keynesian style.
As an example of this point Polifog points to the video of a discussion with two North Carolina Congressmen. Rep. Patrick McHenry and Rep. Brad Miller earlier this year via Bloomburg. The discussion begins at around 50sec. in:
Brad Miller argues, "When you spend money it ripples through the economy....That's textbook economics. That's the whole idea behind the plan." The "textbook" Brad Miller is pointing to is Keynesian Theory but what is being implemented is a Bastardization of Keynesian Theory. In operation Bastardized Keynesian Theory is used to argue for spending throughout the economic cycle meaning we entered this downturn riddled with debt. Keynesian Theory and the Bastardized Keynesian Theory implemented are not the same as Brad Miller seems to think.
Patrick McHenry argues: "What I want to have is real small-business tax relief." This argument has Keynesian elements as Brad Miller pointed out in response, but that is because McHenry made only half the argument. Tax relief becomes Bastardized Keynesian Theory if it comes at the expense of increased debt.
We have to recognize the dire situation we face concerning our national debt. Currently our Federal Reserve is purchasing our own national debt in much the same way a shill is used to influence auction prices. This is a screaming sign that that source of funding is beyond tapped.
But Brad Miller is locked in a Keynesian mindset that ignores the awful effects of the implementation of Bastardized Keynesian Theory. Miller's argument is unable to rely on cuts in government spending to pay for his plan as it defeats the plan's original purpose. As a result Brad Miller's argument relies solely on increased debt for funding as there is no alternative. This is the reason Democrats and Brad Miller are unable to live up to their Pay-Go promises again and again and again.
Patrick McHenry's argument that, "What I want to have is real small-business tax relief," did not specify funding. Brad Miller rightly labeled the argument as Keynesian as he assumed it would be funded out of debt. Had McHenry completed the argument with a source of funding such as shrinking government, he would have had something classically non Keynesian that would have been a path out of our current economic difficulties.
The point is that, although Keynesian Theory allowed for government debt spending during economic downturns to, as Brad Miller put it, "prime the pump," it does not allow for government debt spending throughout the economic cycle (Bastardized Keynesian Theory). As a result our debt pocket is empty when needed most.
We have only one place to turn. Tax cuts to stimulate the economy (as Brad Miller argues they do) that are payed for with reductions in government across the board; equal opportunity slashing. No program should be more equal than the other.
And finally a repudiation of Bastardized Keynesian Theory and Brad Miller - A Keynesian sock puppet.
End of part 1
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