Keynesianism isn't socialism & it's not intended to be long-term
Jan 18, 2012 12:00 am
To the editor,
In Steve Earle's recent letter, "Keynesians fix a broken bubble by folding it into an even bigger one", Steve misrepresents what I have written. Mr. Earle implies that I think things are "fine". On the contrary, I have always said that things are 'improving'. The president's strategies are working, albeit slower than the people would like. The stimulus package was too small and the GOP fights everything Obama so things will continue to go slow with "the worst Congress ever" with its 9-percent approval. They endanger recovery so things are not "just fine".
Mr. Earle also says, " I'm hoping people have enough sense to recognize that Keynes doesn't work long-term, socialism has never, ever worked anywhere and that it's time to pay down the credit cards." Keynesianism is not socialism. There is no such thing as "long-term Keynes". Keynesian strategies are always short-term applications to prime the pump of an anemic economy. Keynesianism is like a crowbar for dislodging trapped liquidity then gets put back in the tool box after its short use.
Roger Davis also seems to get his economics from Fox & Friends. In regards to unemployment benefits, Roger asks, "how does paying people not to produce grow an economy?". Unemployment benefits AND food stamps, (even more so than demand-side tax cuts), help pump up the economy because most of these benefits are spent quickly. Purchases create demand which require supply. Every cent of the benefits spent helps retailers in almost every sector and those retailers need suppliers. Ending or cutting jobless benefits would harm an already fragile economy. In states with the highest rates of unemployment, cutting unemployment benefits would hurt families, then the retail economy which would then effect farms and factories that supply them.
In Russ Wiles' recent letter there is also another misrepresentation of what I have said. Contrary to Russ's claim, I have never specified the cause of the European meltdown. I have only addressed the present remedies of austerity which have failed. Austerity by itself will not only make economic matters worse, society will react strongly, further impacting the market. Stimulus plans with austerity measures that kick in at certain designated points are wiser.
Compounding the failure of austerity measures, S&P downgraded the credit rating of nine European nations on Friday the 13th. Part of S&P's statement reads, "As such, we believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues."
The plans in Europe are as foolhardy as the GOP House plans. Austerity only, no real job bills, slash slash slash. Do you realize that according to the latest Internet meme, the GOP House in 2011 introduced 44 abortion bills, 99 religion bills, 71 family relations bills, 36 marriage bills, 67 firearms bills, 522 tax bills, 445 government investigation bills — AND NOT ONE JOBS BILL. Good job! What an obsession!
James Veverka
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