searesponse,
I'm sure you're busy with more important things. I want to move this forward so other Keynesians can come to your rescue.
When the banks tricked the federal government into accepting fiat money as the legal tender, the banks got control of the currency and the government got the ability to borrow and spend so the representatives could buy elections. They needed some high purpose that gave them cover. Keynes' monetary philosophy was just the ticket they needed. He single handedly made it possible for government accumulation of debt to appear noble.
To be fair to Keynes, he proposed a system that would be revenue neutral. He wanted government to stimulate when times were bad and then increase taxes when times were good to pay back the borrowed stimulus. The politicians abused the premise. The economy rarely has been good enough to pay back the borrowings. The last time the federal government had a surplus was in 1961.
To make matters worse, economists and bankers have convinced citizens that economic affairs are simply too complicated for the average person to understand. Citizens who should be the watchdog of government have been transformed into consumers of government largesse. The corn syrup sweetness of stimulus has left us obese, weak, and dependent on further stimulus. The more the politicians promise to supply and the less they make the recipients pay, the more likely they are to be elected. As a result, we have huge unfunded liabilities (social security, medicare, medicaid, etc.) that dwarf the actual cash balance deficit.
So, we find ourselves here and now. We've got peak oil driving up the price of energy and limiting our ability to grow out of the problem. We're being crushed by a debt load equivalent to many years worth of all economic activity. The demographics are aging every day with fewer contributors and more retired takers from the system. The paranoid government surveils every thing they can. The list goes on and on and …
I see it all ending in a trail of tears. The promises that can't be kept, won't be kept. The longer we fool ourselves into thinking an actual solution exists, the worse the resultant devastation will be. The sooner we admit defeat, the sooner we can rebuild from a solid foundation. That's as cheery as I can imagine it.
What I'd really like to hear is a solution of how we can escape this quagmire. I don't care if it is Keynesian based or not. I don't care if it comes from searesponse or from anyone else. If it is a Krugman type solution that requires significantly more of the same, be prepared to back up your statements. You don't need a perfectly fleshed dissertation. Just start with an idea. We'll work from there.
In the end, if you can't support your version of Keynesian religion, I hope you have the integrity to stop touting it, particularly to friends and associates who are vulnerable to its seduction. Actually, I hope you will wake up and educate your Keynesian friends.
Grover