Opposing the Keynesian Illusion: Spending Does Not Drive the Economy \ stacker news ~econ

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Opposing the Keynesian Illusion: Spending Does Not Drive the Economy mises.org/mises-wire/opposing-keynesian-illusion-spending-does-not-drive-economy

204 sats \ 7 comments \ @Undisciplined 21 Jan econ

By Jonathan Newman

The central pillar of the Keynesian system is that spending drives the economy, so savings on a large scale will push the economy into recession. As Austrians know, that narrative is entirely false and fails to accurately explain how the economy works.

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43 sats \ 1 reply \ @dough 22 Jan

Value at the center- Spending is a coincidence. That's interesting

38 sats \ 0 replies \ @Rothbardian_fanatic 23 Jan

Value to the consumer is always the center of purchasing in the economy. If the consumer doesn't value the object more than he values the money, he will not spend the money for the good. What the money is is just the means to the ends and only works when the end is what the consumer values.

27 sats \ 2 replies \ @Rothbardian_fanatic 22 Jan

State spending is a net negative to the GNP. They have to take the money from the people, first, then spend it on things that people don’t have as a priority (you know, like Ukraine and politicians’ bribes from Ukrainian kickbacks). At this time they are calling state spending a net positive for the GNP and add it back in as a positive. Bah, humbug.

20 sats \ 1 reply \ @Undisciplined OP 22 Jan

I remember something from grad school about how theft is actually treated the same way as taxes in GDP, but I couldn't quickly find a source explaining it.

The idea was that they don't subtract theft from GDP or GNP, because they assume the goods stolen are worth exactly as much to the thief as the victim. Therefor, on net, theft is economically neutral. So dumb.

24 sats \ 0 replies \ @Rothbardian_fanatic 22 Jan

Wow!!! WTF kind of reasoning is that? The only ones that could possibly reason that way are thieves, themselves, or the thieves’ associates. I guess you could say that the court economists/historians/lawyers/jesters are all cut from the same bolt of cloth. The person owning something only owns it because they thought it was worth more than the money they paid for it, otherwise they wouldn’t have bought it in the first place.

15 sats \ 1 reply \ @Msd0457890 22 Jan

So spending can boost the economy, but the relationship between spending and economic growth can be negative, neutral or positive. This depends on the school of economic thought and the quality of the spending.

24 sats \ 0 replies \ @Rothbardian_fanatic 23 Jan

No, it depends upon production. You have to have production before spending on consumption. Some of the spending that goes into GDP is made by b2b for production purposes, which is good. State spending is always and for ever the destruction of wealth of the population. This does not depend upon the school of economics, it is what happens.