Economy pundits confuse cause, result

The so-called establishment economic "experts" raised on Keynesian claptrap lament these days about the "paradox of thrift."

Based on the fallacious notion that the key to prosperity is consumption, they complain about people's propensity to save during a recession, which of course makes perfect sense for those who wonder if their job will still be there tomorrow.

But this is a consumer driven economy. Therefore, we need a stimulus package of government spending and tax cuts to jump-start the economy and get consumers spending again.

Of course, these befuddled apostles of Keynes confuse cause with result. In a truly prosperous economy, consumer spending is a result of productivity and the resultant prosperity, not the cause. If it were the cause, then why not a $700 trillion stimulus package instead of $700 billion.

Deep down, these "experts" know that there isn't any $700 billion to stimulate with, let alone $700 trillion. One must save and invest first before having money with which to stimulate. But printing this money might make some people feel good for a while. Sure, in the long run, such a tactic is inflationary, but heck, in the long run, we are all dead, as Keynes was apt to point out when asked about his inflationary policies.

In a "democracy," which this country has unconstitutionally devolved into, politicians must constantly pledge the moon to constituents, whether they can deliver it or not. With their enabler, the Federal Reserve system, the politicians can create and to an extent, perpetuate the illusion that it is indeed the moon, that they have delivered to its constituents. If there is a problem, government is there to solve it. "Do something!" And the politicians deliver.

As H. L Mencken once said, "Democracy is the theory that the common people know what they want and deserve to get it good and hard."

Kenneth Prazak

Elgin