But what if they were millionaires?


Today my professor was teaching my class about Keynesian economics. I watched in awe as he drew graph after graph explaining how governments can eliminate recessions. Apparently when the Fed increases the money supply by 10% it means we completely avoid a recession and prices increase by 10%. But that price increase doesn’t hurt because everyone has 10% more money – money going exactly where it needs to is another perfectly reasonable assumption. Many Libertarians and other advocates of free markets will spend a huge amount of time explaining why Keynes’ theories don’t actually lead to economic success. I have spent a lot of my time pointing to terrible economic consequences of Keynesians running the show; however, I think that this focus misses the point. Even if a manipulative government outproduced a hands-off government would we want it? Read the rest of this entry »