Posted by: Lazy Jack | November 3, 2009

Of Keynes, Kerry, Krugman and Modern American Bondage.


Keynes, Kerry, and Krugman: bringing the torches and the hemp hangin’-rope to a free market near you.

Once upon a time, in an episode of the adult cartoon Family Guy, Seth MacFarlane wrote a joke about a new threat to our well-being. The “Super Devil” had replaced the devil and had been sighted in Texas. In a faux Texas draw, the cartoon newscaster turned to his partner and said happily, “It looks like we’ve all got something new to fear.” I am a fan of MacFarlane and company, but it must be stated that for this entire decade his highly rated show contained dozens of negative jokes about Bush, Cheney, and Republicans in general.  This drumbeat was, of course, universal among the general media outlets.

During the last election cycle, Republicans were the party of fear. The media portrayed the party in general and Bush specifically as liars who manufactured crises in order to play on our fears.  According to their political opponents and the organs of television, film, and print, the Republicans’ objective was to keep the public in perpetual anxiety in order to keep the wars going and protect their base of power.

Well who is doing the fear mongering now? Not the democrats, of course. Oh, wait, what is that we hear about the horror show awaiting us if we do not nationalize healthcare? Millions will suffer and die if we do not act now. And, a world without stimulus is a world without sunshine. If you do not support the stimulus you are condemning millions to unemployment and to poverty. If new environmental legislation is not passed Denver will be ocean front property and it will be your fault.

Paul Krugman, that supremely educated fluffer for the left, is opining that $800 billion in stimulus was not enough. We need more, more, more or your kids will go hungry. The free-market, after sustaining us for two hundred and thirty-three years, is incapable of sustaining you. The fact that one individual might make four dollars more a year than the next person is akin to the holocaust. Paul tells you that John Maynard Keynes was really right all along. Since 1932 the U.S. has adopted wholeheartedly the Keynsian pump priming model and has expected a multiplier effect. But is it really true? See below.

1966 2008 2009
Government spending (Billion’s) $216 $5,297 $6,456
GDP $789 $14,441 $14,240
Government spending % of GDP 27.4% 36.7% 45.3%
Unemployment rate 3.9% 7.2% 9.6%
Poverty Rate 14.7% 13.2% 14.5%
Generational Obligation (Billions) $717.0 $42,000.0 $61,000.0
Government Spending Definition All Federal, State, and Local Spending
Generational Obligation The deficit gap obligated to taxpayers for the trailing 80 years
Generational Obligation for 1966 is an estimate, as is the GDP for 2009. Generational obligations are estimates based on projections by the CBO.  Other data is derived from the US census, From the CBO, and from the Executive office of the President of the United States, specifically the budget and its associated historical tables. The 2009 poverty rate is an estimate.

 

If we are to believe the three Ks, the twenty-nine fold increase in government spending from 1996 was just not enough to solve our problems. A twenty-nine fold increase helped the GDP to an eighteen fold increase. Wow, that is a heck of a multiplier!  Keynes would argue that we have not spent enough to eliminate poverty. Krugman (last year’s faux Nobel winner) would parrot Keynes. And Kerry, well, he would vote for it because Krugman and company tell him to. For that vote he gets to keep his future K street residence.

In reality, we have been asked to believe that more government intervention is better for us, that we will be more equal, that our air will be cleaner, that our kids will be healthier, if only we surrender a little more to the motherland. The greatest modern irony is that this is administration and congress may be the gang that finally consigns each and every American family to permanent indenture. They promise free healthcare, to feed and clothe us. Keynes, Kerry, and Krugman would even ask you to believe that more government intervention would improve your health. Abraham Lincoln would have called all these promises lullabies, calling on language he used during debates with Douglas. Please review the table below.

1910-1940 1940-1970 1970-2003
Increase in Life Expectancy (Years) 12.13 7.13 6.65
Source: U.S. Centers for Disease Control

Since 1966 we have increased government’s share of health spending from 27% of the total to 48%. The proposed legislation in congress would nearly double the current expenditure by government. We can infer from this table that there is a correlation between the growth in government spending and the growth in your life expectancy. Specifically, the growth in government spending appears to reduce the growth in your life expectancy. This thumbnail ignores all other contributing factors, but it does prove that despite the massive subsidies, the growth in expected life spans slowed. We are told everyone loves the Medicare and Medicaid program by pundit after pundit. One has to wonder why since it appears the advent of those programs in the sixties may have contributed to shortening their lives.

In today’s media environment if you do not support ‘clean’ energy, more government regulation, state-run healthcare, and despise business people the boogeyman will get you because you are a bad person. It does not matter that there is ample evidence that government intervention helps people only in very limited ways, and has proven extraordinarily harmful in places like Russia, Nazi Germany, Zimbabwe, Cuba, and even in the U.S. Good intentions are one thing, but what will be the real unintended consequences of unleashing the state and increasing its grip to the equivalent of 60% of our economy?

We are being asked to believe that unlimited government will solve all our problems, if only we submit the first fruits of our labor to its noble cause. If we do not, the consequences will be fire, famine, and flood. As MacFarlane says, looks like we all have something new to fear. You are being asked to dedicate more than half your income funding government and indenture your children and their children to a century of debt to pay for the rest. On the day my children were born they were obligated to work their entire lives to pay off our debt. In simple language, they were born into the new indenture.

144 years ago a Republican led brave men and women in the fight to end bondage in this country.  How poetic is it that the Democrats, who controlled our legislature for 61 of the last 77 years, have brought it back?  If you believe in limited government, free markets, and liberty, Keynes, Kerry, and Krugman have the torches, rope, and your answer.

Best,

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009


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