Guest Post: Top 10 Keynesian Ways To Boost The US Economy

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Submitted by Jason Kaspar of Goldshark

Top 10 Keynesian Ways to Boost the US Economy

Keynesian economists are propagandizing the media with
a unified message; in one breath lightly touching on the human tragedy
in Japan, while in the next anticipating with delight the economic
recovery it will (supposedly) create. The natural disaster in Japan is
tragic both on a human level and economically. Japan may,
possibly, enjoy a GDP boost in six months or so as a result of some
rebuilding, but the billions in present-day lost productivity will
easily negate any future upside.

The buildings and businesses with billions in loans have (and will
continue to) experience enormous losses. Who will realize these losses? 
Insurance losses – the capital that would be invested in other
productive assets - now must cover billions in claims.  And what about
the economic impact resulting from the loss of nuclear efficiency?
Consider the power situation in Japan over the coming months with 40% of electricity
used in greater Tokyo historically originating from the Niigata and
Fukushima prefectures.  In totality, it is mystifying how any economist
could predict a net economic positive.

But, then again, here come the Keynesians. Perhaps no statement has been more shocking than Larry Kudlow’s callous gem
(he later apologized): "The human toll here looks to be much worse than
the economic toll and we can be grateful for that . . . all these
markets stocks, commodities, oil, gold, there is no major breakout or
breakdown. I have to view that positively." Kudlow's comment may have
been a slip up, but it is one example of many.

There’s Mohammed El-Erian writing in the Financial Times:

“Attention also turns towards the extent of the damage to
the economy and its reconstruction and rehabilitation plans . . .
Japan’s economic growth rate will fall in the immediate aftermath of the
natural disasters before rising sharply due to reconstruction
activities . . . Moreover, in a really good recovery scenario, Friday’s
dreadful shock could even be a catalyst for internal political unity and
for overcoming what has been two disappointing decades of economic
performance.”

Not to be outdone, Goldman Sachs recently issued a report touting the likelihood of a Japanese recovery.

Let’s follow the Keynesian approach. I have come up with
the top ten ways we can boost the US economy using that same Keynesian
rationale.

1. Air Force Bombing Practice

For an entire day the Air Force can carpet bomb our
interstates and highways. Why should Libya get the economic boost? Roads
will be off limits to avoid human casualties (building up productivity
for the lost work, right?) and we can kickstart the construction sector
still reeling from the housing and commercial real estate nightmare.

2. National Food Fight

Let’s take it back to the college caf and have a food
fight. Our processed food tastes terrible anyway. Rules are: any and all
food may be thrown at other Americans, but under no circumstances may
food be preserved. Think of the fun. Sure, our hybrid, pinkish,
crossbred, Monsantified tomatoes aren’t quite as messy as they used to
be, but boy do they hurt more. Anyway, this is America. We have drugs
for that.

3. Public School Fire Day

Every kid wants to burn down his school, right?  (Ok, ok,
besides the homeschoolers.) Well, Keynesian Public School Burning Day is
their chance. It can be a teaching experience for Keynesian economics.
We can invite George W. Bush, so that no child is left behind.

4. Little Rascals Day

We'll give American children a bucket of baseballs and
eight hours to break as many windows as possible - a national event with
no spankings, groundings, or consequences. Let them loose on cars,
houses, whatever. Think of all the fun in the neighborhoods.  Red
houses, blue houses, yellow houses. They could start with the White
House.

5. Political Car Bashing Event

We'll have all senators and state representatives bring
the cars in their household to Washington, where individuals can take
free swings with a baseball bat. Call’em Porsche piñatas. With 100
senators and 435 state representatives, you’d have 1600 vehicles at a
minimum. Besides economic stimulus, the electorate could let off some
steam. It would be better than cash for clunkers – it would be the bash
for flunkers.

6. Skyscraper Demolition

We could just take down the country the old-fashioned way, with a Marlboro and thermite.

7. Cut It Up

Afraid of cutting up credit cards, we can unleash the
fiscally irresponsible on the lackluster retail sector and have them cut
up, chop up, and rip up poor quality Chinese-made clothing that
typically bleeds after one washing anyway. (This plan would actually be a
good idea if all of the clothes manufactured for American Don Juans
weren’t irrevocably produced in Dongguan).

8. The E-Party

We can develop a clay pigeon iphone app and finally give
the gun-totin’ Palin-lovin’ domestic militiamen something to shoot at.
We can call it the E-Party against smartphones. Actually -- this may not
work. Doubtful the drug companies need more stimulus.

9. Bumper Planes

This one might not work either. I was thinking we could
have some destructive fun on the tarmac with Boeings and Airbusses (ya
know, to help boost the economy), but getting through security screeners
would be a radiation hazard, and getting a rubdown from an agent would
be worse.

10. Control-Alt-Delete Day

Now here’s one that will definitely boost the economy. We
can dump the computers of air-head economists into a pool of highly
fluoridated toxic tap water. Biggest splash wins!  Let's begin with Paul
Krugman.

In all seriousness, how can any economist interpret the
tsunami disaster as economically positive without logically supporting
the controlled demolition of the United States? How would the results
not equate? This is the irrationality of Keynesian models. Regardless of
debt levels, inflation levels, natural disasters, inventory gluts, etc.
the answer to economic problems always culminates in further spending.

There can be positives and negatives to spending. During
the Reagan years, the economy was not over leveraged, so spending
created a net positive for growth. But when the economy is over
leveraged (including governments) like it is today, and like it is in
Japan, both destruction and spending can be catastrophic.  When inflation accelerates, further spending becomes the problem and not the solution.

Many economists would laugh off my attempt at sarcasm with
the top ten listed above, but inwardly their economic theories serve to
justify such irrational policies, only they couch their theories under
academic names.  Debt spending can work for awhile….but it cannot work
forever.