Why is it impossible for stimulus to to have a
net positive effect on the economy? I can give
all kinds of explanations as to why, both
abstract and down to earth. That is nice and
perhaps would be entertaining but it is not
necessary. Human nature does not allow these
programs to work.
Keynes, the father of stimulus, certainly argued that objectivity and non-bias were completely necessary. Keynes did not grasp that objectivity and non-bias are not possible in government. Government cannot make economic decisions. Governments make only political decisions.
A kid with $5 in a candy store makes an economic decision. Congress or the Federal
Reserve make political decisions. That being the case, there never has been and never
will be a case where an economic decision is made with respect to stimulus. It is a
contradiction and impossible. Keynes called for non bias, but there is no way to get a
non – biased decision – where stimulus is concerned.
So what we have , is stimulus applied one way or another every year. Leaders always find
it necessary. Stimulus is very good for those who get it, but that is not you. To benefit
from stimulus takes massive political power. I do mean massive and that amount of
power is what it takes to dictate policy to government.
Lets see, who has massive political power? Is it the rich or the poor? Look at how the
income distribution has changed since stimulus was virtually made mandatory with the
Full Employment Act of 1978.
What percent of the nation’s income went to the upper 1% in 1978? Find the answer
What percent of the nation’s income went to the upper 1% in 2021? Find that answer
Use 5% instead of 1% if that is easier.
massive political power and an impoverishment at the bottom who just pay taxes.
The question students need ask their economics professors …. is why it is deemed good to
teach students theories when there is a genuine guarantee that they will never be used at
the right time?