A Crises of Keynesian Economics

by James Jaeger

When you utter the word "Keynes" or say the name "John Maynard Keynes" most people return a blank stare. So who is Keynes and how does he relate to the current "government shut down"?

Keynes was a British economist who, in 1936, wrote his most famous book, "The General Theory of Employment, Interest and Money". This book made the case that it is good for governments to borrow money. Keynes argued that governments should borrow money so they can use that money to "stimulate" the economy. This is now known as "Keynesian Economics."

Even though another economic school known as "Austrian Economics" existed in the late 1930s, it was ignored, especially by governments. The most prominent Austrian economist was Ludwig von Mises, and, in 1949, he wrote a book called "Human Action". This book made the case that it is NOT good for governments to borrow money. Von Mises argued that people should work hard, produce valuable products, and then SAVE part of the money generated by such products. This saved money -- known as "capital formation" -- could then be used to finance new products, services and entire industries. In short, no one would have to borrow. The governments and banks HATED this idea, so one can readily see why von Mises -- and other Austrian economists, such as Hayek, Rothbard and Hallock -- were quickly buried.

But was this burial a good idea for WE THE PEOPLE of America? For here we are in 2013 with an unimaginable $17 trillion National Debt and hundreds of trillions in long-term liabilities. Maybe we need to take a closer look at debt and Keynesian economics, the "justification" of the debt-based economy.

Patriots in the Tea Party and Ron Paul Revolution understand all this. They understand Austrian economics and the fallacies of Keynesian economics. Given this understanding, they don't feel it is a wise choice to allow the U.S. Government to "justify" endless debt in the name of "growing the economy." After all, since when is it the government's job to "grow" the economy? It's the PEOPLE's job to GROW the economy through free enterprise in a free market. Where does it say in the Constitution that the government should borrow trillions of dollars to "grow" or "stimulate" the economy? It doesn't. And THIS is why the Tea Party has shut down the government. THIS is why responsible members of the House will NOT wield the "power of the purse" to raise the "debt ceiling" -- hopefully EVER again.

Oh no, we won't be able to "pay our bills," scream big-government statists, like Jack Lew of the U.S. Treasury, and Keynesian economists, like Paul Krugman of the New York Times. You hear them spewing the terms: "can't pay the bills" and "default on the debt" over and over and over. So let's take a look at these polemic outbursts: "pay the bills" and "default on the debt."

Pay the Bills:

Under Keynesian economics it's perfectly okay for the government to BUY anything it wants or make ANY financial commitment it desires, at any time. Entitle any and all Americans to any and all free stuff/medical services and/or build a global, standing army that polices and surveils the world. No prob! These are just "bills." And all these things -- the "bills" -- will get "paid" when the government borrows MORE money. And the government can and should borrow MORE money, as much money as it wants, say the Keynesians. Borrow to "stimulate demand" they say. Get people to "consume" like cows they say. Borrowing is good. More borrowing is better and infinite borrowing is best. And this borrowing creates DEBT -- but debt is also good. It "stimulates" the economy. It creates "demand." The government can "pay the bills" with it. The government doesn't even need to tax when it can borrow all the money it wants. It can print all the money it wants in order to "pay" for the very debt it creates. THIS is what the Keynesian-infested Democrats in the Senate and the Non-Tea Party conservatives in the House love. This is how and why they always want to "pay the bills." This is why they want to raise the debt ceiling for the 23rd time since 1981 -- so they can run up more "bills". So they can "justify" raising the debt ceiling next year to "pay the bills" they are incurring THIS year and the years after that ad infinitem.

All of this insane, psychopathic thinking is a result of Keynesian Economics. And the main guru that is spewing it onto the American Public -- through the consolidated mainstream media of CNN, MSNBC, FOX NEWS -- is PAUL KRUGMAN of the New York Times.

Default on the Debt:

On 6 October 2013, Jack Lew of the U.S. Treasury had the gall to say on CNN's show, "State of the Union," that, if we don't raise the debt ceiling on the 17th of October 2013, the U.S. may default on its debt for the first time in history. This is a lie. The U.S. defaulted on its debt in 1971 when it refused to honor gold contracts to redeem the excessive paper money it was then printing with abandon and tossing all over the world. This irresponsible act was sold to the American People as "Nixon closed the gold window because the Europeans were taking all our gold." This is an obfuscation of the truth, because all the Europeans were doing was redeeming paper U.S. money for the gold that backed it and to which they were rightful entitled to whenever they felt the U.S. government was printing up too much paper currency.

But it gets even worse. Not only did your lofty representatives in Washington DC "default on the debt," they blatantly "stole money" from the American People in 1933. With "Executive Order 6102" signed by the socialist president -- Franklin D. Roosevelt -- possession of gold (then lawful "money") by any individual or entity was now a "criminal" offense. Here the PRESIDENT of the United States, who is charged with PROTECTING the rights and property of WE THE PEOPLE, blatantly STOLE the property of WE THE PEOPLE and violated their right to redress. Not even King George treated the Colonists like this.

So when Keynesian, debt-addicts like Lew or Krugman toss around the terms, "pay the bills" and "default on the debt," KNOW that they are using these "terms of passion" in order to sucker YOU once again into extending the government's credit card limit for the 23rd time in 32 years. Be assured, if the "debt ceiling" IS raised yet again, the National Debt WILL grow from $17 trillion to at least $22 trillion AND your irresponsible congressmen, operating on the FALSE theory of Keynesian Economics, WILL spend every single cent of the credit card limit "paying the bills" to "stimulate the economy" and to avoid "defaulting on the debt." THIS is all horse.

WAKE UP AMERICA! It's time to STOP making the private Federal Reserve Bankers rich. It's time to STOP funding the global, standing army. It's time to STOP funding the WELFARE and let people get back to REAL work without endless government regulations, subsidies, fiat currency and interference. It's time to STOP paying the salaries of a million government workers who have NO business being employed by the government in the first place. It's time to NOT "pay the bills." It's time to DEFAULT on the Keynesian insanity that has body-snatched Washington, mother-murdering DC. KEEP THE GOVERNMENT AND THE USURIOUS BANKING CARTEL SHUT DOWN.

A History of Usury:

Usury is defined most simply as "lending money for profit." According to the progressive mentality, PROFIT is a dirty word except in one (1) industry: banking. Banks -- especially Federal Reserve Member banks -- should be able to PROFIT from the lending of money as much as they want and it's supposed to be acceptable, even encouraged, by society.

But this was not always the case. In medieval times, lending money -- "usury" -- was universally condemned as a heinous and immoral act by the Christian church. The act of usury was deemed a mortal sin, and its practitioner's path of greed was understood to end in the damnation of eternal Hell.

The idea of profiteering from someone else's' need -- possibly a desperate need -- for money was believed to be the antithesis of compassion, generosity and charity. Common wisdom asserted that those who already HAD enough surplus money to lend were obsessed with greed and avarice if they needed to generate yet more money for their coffers through usury. Further, it was considered that making money for doing absolutely nothing (except having the money available) went against Christian understandings of decency, justice, honest work, and morality.

In essence, usury was perceived as a CRASS system of exponential exploitation by which the already rich could get increasingly richer for little more than the fact of their wealth in the first place. In the nineteenth century, thinkers argued that 'usury centralized monetary wealth and attached itself to the means of production like a parasite sucking out the economic blood of its victims and eventually inhibiting or destroying the host nation.'

Hello. Doesn't this sound exactly like the unemployed, debt-ridden, 21st Century America we now live in? Maybe "paying the bills" and borrowing money for government expenditure should be called what it is: "usury".

It's the Debt-Ceiling, Stupid:

But to listen to the mainstream pundits and big government apologists in the Senate, one would think "usury" is a GOOD thing. And one would think that the current government shut down was JUST about ObamaCare. Or is this an obfuscation: put everyone's attention on ObamaCare and they will forget about the usury that has created the $17 trillion National Debt.

Such apologists of usury say: "An extremist faction -- the Tea Party -- has taken over the more moderate Republicans in the house," or so the story goes. No, this is NOT the story. The STORY is all about the $17 trillion debt and the fact that Americans are FED up with the endless promises that the government -- both parties -- will live within its means each time the "debt ceiling" is raised. Again, it has been raised at least 22 times since 1981 regardless of whether the Congress was Republican-controlled, Democrat-controlled or under split control. The DemoPublican Party is responsible.(1)

And EVERY time the debt ceiling has been raised the Keynesian-justified Government borrows to the limit and gets us all deeper into the throes of usury. We are now so deeply in debt, the Federal Reserve System has to monetize 85 billion Federal Reserve Notes every month just to keep the Ponzi going, i.e., "pay the bills" and "service the debt". Yet Debbie Wasserman Shultz -- and her tax- borrow-and-spend cohorts -- comes along and asks for yet more debt for her buddies in the Federal Reserve banking cartel. But this time Americans are expected to swallow the ultimate debt, the ultimate expansion of government: universal, socialized healthcare that will cost trillions. More "bills." All this is going to end one way or another.

Ending A: the U.S. and entire global economy as well as the dollar are going to implode into a pile of burning rubber.

Ending B: the American people, lead by responsible, Constitutionally-savvy patriots like the RON PAUL Tea Party are going to JUST SAY NO to the strung out, debt-addicts all over mother-murdering Washington DC.(2) Let's go for Ending B by:


Keeping Government Working:

The best way to keep government working is to SHUT most of it down, keep it shut down and STOP lending it money.

As this is written, the government has been shut down for 5 days and 13 hours. In this brief period of time, WE THE PEOPLE have saved billions of dollars. With this money, imagine how many people like Walter White or Jesse Pinkman of BREAKING BAD fame could be educated and helped with their drug problems instead of just incarcerating them? Think how many vouchers could be given out to parents across the nation for school choice. Think how much of the national debt could be liquidated. Think how much money would be available for entrepreneurs to start new businesses. Of course the mainstream media -- still spewing the Keynesian-government line -- wants you to feel sorry for some 800,000 government workers who have been furloughed (gov-speak for "temporary unpaid leave."). Gee, some parks and libraries won't be open. Some trash will sit around on DC's streets, as if this were the only trash problem DC has. And the DHS guy with a MACHINE GUN standing outside the Congressional Rayburn office building . . . well maybe he's gone too.

Yes the longer the government remains shut down, the more WE THE PEOPLE can and will realize that they actually have options. One of these options is the fact that they don't need a multi-trillion-dollar-parasite on their backs printing endless fiat currency and running up endless debt in order to fight perpetual global wars in the name of oil and Israeli security. LET THE GOV STAY SHUT DOWN FOR-EVER . . . NOT JUST FOR-LOUGHED.

The Real Cost of Government:

Government is a service. It's not unlike your electric service, your phone service, the service station where you get your car repaired or your psychiatrist's services. But unlike other services, you are forced to pay for government services, at gun-point if necessary.

And to make all the services government provides you possible, the American People must come up with about $3 trillion per year. If the full $3 trillion is not raised through taxes -- and it never is because past "bills must be paid" -- the government BORROWS the shortfall.

Due to the fact that irresponsible congressmen in the House almost always spend more than they raise through taxes -- again, in order to "pay the bills" -- we now have a National Debt of $17 trillion. BUT, since the government has been shut down for 5 days and 13 hours (133 hours) at this writing, we have also saved as much as $45 billion. At this rate of savings -- because the useless, UNlimited government has been SHUT DOWN -- we could pay off the National Debt in a matter of 5 or 6 years. So why not do it? After all, the National Debt IS one of the "bills." If the mantra in DC is "pay the bills," why not start with this bill. Then the American People can hit two birds with one rock. They can "pay the bills" and NOT "default on the debt," as Treasury Secretary, Jacob Joseph "Jack" Lew, screams.

"But the government puts so many people to work," apologists of big, socialist government and Keynesian economic theory scream. The answer to this is simple. All of the people that are put to work by the government can be hired by YOU. Since you, along with WE THE PEOPLE, are saving about $8.2 billion dollars every DAY the government is shut down, don't you think unemployment could be solved with this kind of money? Sure it can. But Wasserman Shultz would rather have the money go to the government first so it can "manage" the finances as any "trusted" middle-man does. Oh, and that $3 trillion-a-year that government services cost, well it's going to take about $1.5 trillion of this money to "pay the management bill." So WE THE PEOPLE put in $3 trillion every year, but WE THE PEOPLE only get back $1.5 trillion a year and the rest goes to the "managers" in Washington DC -- you know, the ones that have "managed" to give themselves real health care rather than ObamaCare.

But Debbie Wasserman Shultz, nor any of the rogue politicians infesting the Congress, doesn't mention any of this. The Tea Party House Members don't even mention it -- yet. And this is why Shultz was recently on CNN lying that the government only costs "150 million a day." Well, do the math. If the government takes in $3 trillion a year and spends ALL of it, it is mathematically impossible that it is NOT spending $8.2 billion a day ($3,000,000,000,000 divided by 356 days per year = $8,219,178,082 per day) So even if we don't "save" $8.2 billion a day, we save a lot. And the more of the government that's shut down the more we will save up to a potential savings of $8.2 billion a day.

So the next time you hear one of the pundits or politicians on TV uttering the "pay the bills" mantra, realize that you are dealing with a totally brainwashed individual that has been subjugated to the Keynesian propaganda since TV was invented. Feel sorry for them and consider what WE THE PEOPLE could do with even a fraction of the money saved from government shut down. THIS is the solution to our problems. Shut the government down until it is the LIMITED government envisioned by the Founding Fathers. This is how we "pay the bills" and resolve the Keynesian crises that has gripped our Constitutional Republic. Carpe diem!

(1) See

(2) This is a reference to the excessive use of force the Capitol Police in DC used when they gunned-down a mother with a 12-month old child in the back seat of her car on 4 October 2013. Not only this, the Congress actually had the audacity to give a standing ovation to the Capitol Police for their murderous deed. See

06 October 2013

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