22 Respected Economists Say Stimulus Package 2011 Will Fail

President Obama is trying yet again to spend his way out of the economic crisis with Stimulus Package 2011, and trying to convince everyone this time is different. It was Edward De Bono who said it might be time to stop digging the same hole. Try digging a different hole Mr Obama, one that 22 well respected economists from days gone by dug ūüôā and if you listen will give you the keys to the kingdom.

For Baby Boomers this is yet another blow to your long-term plans. If he is successful in passing the Stimulus or even a watered down form of it through Congress it will just exacerbate the economic crisis. The 22 wise men from history will explain why Stimulus Package 2011 is yet again the wrong thing to do.

Henry Hazlitt on Stimulus Package 2011

It is more on wrong-headed Keynesian deficit spending no matter how it is dressed up. Mr Henry Hazlitt spent much of his life refuting Keynes and his economic theory. But politicians took to it like ducks to water. Roosevelt failed to solve the unemployment problems after three years on Keynesian ism with massive deficit spending programs. When it failed, supporters just said the deficit spending did not go far enough. Where have we heard that before? History is repeating itself yet again.

“It¬† is¬† significant¬† to¬† recall¬† that¬† the¬† first¬† definite¬† and¬† conscious
application  of  the  theory  was made by the  New  Deal;  and  when
in  the  third  year  Mr.  Roosevelt  began  to  say  that  the  govern-

Why Stimulus Package 2011 Will Fail

22 Economists Tell Us Why President Obama's Stimulus Package 2011 Will Fail

ment’s¬† deficit¬† spending¬† must¬† be¬† regarded¬† as¬† an¬† investment¬†¬† in
the¬† country’s¬† future,¬† he¬† was¬† taking¬† the¬† word¬† directly¬† from¬† the
Keynes theory.  The  promised results did not follow;  unemploy-
ment  was  not  cured.   This  disappointment,  say  the  believers,
was owing  to  no  fault  of  the  theory  but  simply  and  only  to  the
fact  that  the  deficit  spending  did  not  go  far  enough.  The  defi-
cits should¬† have been courageously¬† greater.”

So if $700Bn didn’t work the first time what chance is $450Bn or so going to have. One Congress woman is calling for $1 Trillion stimulus.

Mr Hazlitt’s opinion on Keynes General Theory is worth mentioning too:

“But¬† perhaps¬† it¬† is best¬† to begin¬† with¬† a statement¬† of¬† what
can  not  be  found  in  the  General  Theory.   In  spite  of  the
incredible  reputation  of  the  book,  I  could  not  find  in  it  a
single  important  doctrine  that  was  both  true  and  original.
What  is original  in  the book is not  true;  and what  is true  is
not  original.  In  fact,  even  most  of  the  major  errors  in  the
book  are  not  original,  but  can  be  found  in  a  score  of  pre-
vious¬† writers.”

How is it possible that most economists in the world today do not question Keynesian economics in the face of all the evidence of its absolute failure. We know the answer to that. Politicians love it as they can fool most of the people and buy their votes with well timed deficit spending.

Jean Baptiste Say on Stimulus Package 2011

“The encouragement of mere consumption is no benefit to commerce. It is the aim of good government to stimulate production, of bad government to encourage consumption.”

Since the 1930’s we have had economics based on consumer spending, and discouraged savings. Savings can be used for long term investment in production. The exchange of produced goods for produced goods using money is what is required and should be encouraged. Not produced goods for money provided by government handouts, either through deficits or taxes.

John Stuart Mills on Stimulus Package 2011

“The¬† usual¬† effect¬† of¬† the¬† attempts¬† of¬† government
to  encourage  consumption,  is  merely  to  prevent  saving;  that
is,  to  promote  unproductive  consumption   at  the  expense  of
reproductive,  and  diminish   the  national  wealth  by  the  very
means  which  were  intended  to  increase  it.

What  a  country  wants  to  make  it  richer,  is  never  consump-
tion,¬† but¬† production.”

He goes on to state that governments need not concern themselves with consumption. They must work to allow producers to produce and find ways to give opportunities to those that are not producing, to get to work producing. This is nothing to do with government handouts though.

There  will  always
be  consumption  for  everything  which  can  be  produced,   until
the  wants  of  all  who  possess  the  means  of  producing  are  com-
pletely  satisfied,   and   then  production   will  not   increase   any
farther.   The  legislator  has  to  look  solely  to  two  points:  that  no
obstacle  shall  exist  to  prevent  those  who  have  the  means  of
producing,  from  employing  those  means  as  they  find  most  for
their  interest;  and  that  those who have not  at present  the  means
of  producing,  to  the  extent  of  their  desire  to  consume,  shall
have  every  facility  afforded  to  their  acquiring  the  means,  that,
becoming  producers,  they  may  be  enabled  to  consume.

You can read the rest of the critics of Keynesianism for yourself in the eBook entitled, “The Critics of Keynesian Economics.By reading history you can begin to see why the whole economic system we have is wrong and needs radically fixing.

After reading it you should be able to see why we are on the wrong path with the Stimulus Package 2011 and why it is yet another blow to your retirement nest egg.

 

 

 

 

 

 

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