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Posts Tagged ‘Keynesism’

You may have seen this rather witty image being bandied about the internet today:

It’s another sad attempt to equate the economics of the governance of modern, highly developed economies such as America with an individual citizen struggling to balance their incomings and outgoings as justification for the sado-monetarist. This is very stupid nonsense. The existence of Government is the recognition that people are interdependent and need an outside agency to coordinate, regulate and protect this civil society. Therefore to pretend that the Government an island unto itself, whose only legitimate preoccupation is balancing the national check book  is wrong. Government cuts to spending does not exist in a vacuum, the Government is after all the biggest single employer, customer and benefactor in all western economies. So you cut Government spending you cost workers their job, businesses their contracts and citizens their entitlements. That loss of economic output then echoes through the economy as a magic bullet, reducing private sector activity and tax receipts.

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