John Maynard Keynes; an astute observer of his times, formalized a basic function between government stimulus spending and national economic growth. Even during the First World War when times were hard in Britain, and afterwards with an economic slump the upper classes were of course not broke and still had deep pockets. What could be more reasonable than to stimulate the national economy with government deficit spending and tax the rich to pay for it?
Keynes (pronounced Canes) did not of course advertise the unstated principle of taxing the rich to pay for government debt. Franklin implanted the policy well enough during America’s depression to tax the rich at a 90% rate and stimulate the economy out of recession with a number of government programs. In America today however the expression of Keynesian government deficit stimulus spending concurrently with tax cuts on the rich produces only deficits that for the U.S.A. presently are reaching toward 15 trillion dollars. The U.S. congress is not honest enough or intelligent enough to use realistic economic formula to make the economy function.
The economy is a whole. Compared to liquid water, when the rich have siphoned all the water upward to a storage pool in their shining city on the hill and the workers and fields perish for thirst, government policy taps the pool to let the taxes on the rich be a pipeline letting cash liquidity flow downward to fill the race paddies so that vitality and rice may grow. The lofty management class too requires some water in ample quantity to finance their ethereal and mysterious economic contemplations in the sky-towers offices and create their own pipelines to return the water back up the hill. The contentious process of water rights-cash economy rights amongst users in the fields and those living in the cloud towers of the shining city on the hill is an interminable phenomenon.
Once the Un8ited States had F.D.R. and Dwight Eisenhower on their side. Now they have Harvard elites concentrating wealth and power with globalism negating national boundaries and suck-up socialists trampling individualism, individual equal civil nights and free enterprise. Class prerogatives have evolved to eclipse individual liberty. Concentrated wealth became a global network economic power phenomenon merging with one-party politics of the East philosophically (not spiritually because they are spiritually dead).
Sometimes in history a nations wealth may become concentrated to such a point that the economy stall. In a democratic society with free-enterprise values and a modestly egalitarian operating system federal tax policy with Keynesian premises is to then tax and redistribute much of the supply of concentrated wealth to economic stimulus programs via the government. What kind of economic development and who should get the stimulus spending is an equally important consideration.
A 2011 study found that in research on 43,000 corporations a small elite group controlled a third of the world’s wealth. If stimulus programs redistribute wealth to networks of already concentrated wealth the economic stimulus is unlikely to employ the unemployed. The federal unemployment measure of real people out of work that would work if there were realistically productive employment opportunities;U-6, has the U.S. rate of unemployment somewhere near 19%. Federal stimulus policy should always stress funding new businesses that will employ from five to 5000 employees for a year or more (or they can repay the loans that would otherwise be written off).
As much as talk radio and political sound biters like to regard redistribution of wealth for stimulus spending in hard times communism it is the history of 20th century economic progress in the west. The Reagan use of Keynesian stimulus spending stimulated the economy yet the concurrent tax cuts started digging the very deep national economic debt hole that seems destined to go through the Earth to China over time. The myth of tax cuts and stimulus spending performing supply-side miracles might work in a different economic world than the one made of people with 4 or 5 % Neanderthal and Denisovan genes, yet in such a world the stimulus might not be needed anyway because it would not be a democratic society.
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