Why Keynesians and Krugman are Wrong
Why Keynesians and Krugman are Wrong

Vox Day absolutely nails the failings of Krugman and Keynesians in The Return of the Great Depression:

“If total spending in the economy was necessarily equal to total income the United States could not be in cumulative debt equivalent to 375 percent of GDP… If someone doesn’t buy an equity or an industrial plant, that doesn’t mean he must have bought a car instead.”

Not every dollar of income must be spent today and not every dollar that is spent today is earned.

“When there is a credit-inflated boom that results in your working at a job in which you produce goods that no one wants, needs, or can obtain financing to buy, and which your employer consequently cannot sell, it naturally follows that neither you nor your co-workers are going to be employed in the near future”.

“in their myopic focus on the aggregate picture, Keynesians constantly ignore the reality that inflation, investment, and unemployment all have a disparate impact on different areas of the economy at different points in time. While these diverse impacts will eventually have a cumulative effect on the aggregate economy, the Keynesians consistently fail to comprehend that, due to the disparate nature of these effects, analyzing them in the overly simplistic Keynesian manner guarantees that their cumulative net effect will be miscalculated”.

“if an investment boom can occur in the tulip bulb market, it can obviously happen anywhere that cheap credit is made available to people who believe they can make money buying and selling in a short-term time frame”.

“Krugman is handicapped by the inability of the Keynesian model to account for time-preference, savings, or the consequence of debt”.

The book is a seriously good read. Not written in a dry academic manner, but as per a good blogger. You can read it on your computer for $1.99 on Scribid or $3.50 for Kindle. For less than two dollars, just buy it.



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