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To: MrB
"Keynes only makes sense if you believe that you can take water out of the deep end of the pool and pour it into the shallow end to make the shallow end deeper."

Keynes believed the government should tax high in the good years and then drop taxes in the bad years and the government then gives back what it took in the good years to smooth out the bad years.

Keynesians believe you tax high in the good years and tax higher in the bad years and keep raising taxes because well they get more money to buy more votes by spending more money on government pork.

22 posted on 10/13/2014 7:37:35 PM PDT by Mad Dawgg (If you're going to deny my 1st Amendment rights then I must proceed to the 2nd one...)
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To: Mad Dawgg

That’s right. Keynes also advocated reducing government spending and paying down debt during the good years so that you could be free to spend during the bad times.

The big flaw in Keynes is that politicians don’t work that way and never will. They don’t look at the long term and will continue to spend during the boom times and constantly increase the amount of debt.

When we operated under the gold standard of Bretton Woods there was still a feedback mechanism to work on Congress to hold spending in check- but again politics won out. Kennedy was the first to ignore a simmering inflation, which only increased under LBJ. And then Nixon scrapped Bretton Woods and cut the dollar loose from gold. The decline of dollar since 1971 is no coincidence.


24 posted on 10/13/2014 8:02:22 PM PDT by Pelham ("This is how they do it in Mexico"- California State Motto)
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