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October 28, 2011

The numbers refute Keynes, Obama, Krugman

The following is presented as an educational
service of the Downsize DC Foundation.
It contains startling facts that refute economic
claims made by
such as President Obama and Paul Krugman. If you read it you will learn . . .

  • How current economic numbers completely refute President Obama, Nobel Prize winning
    economist Paul Krugman, and John Maynard Keynes
  • How left-statists cherry pick the evidence in order to deceive the American people
  • What we really need to do to restore private investment and hiring

High profile left-statists have made much of a recent survey from the National Federation
of Independent Businesses. The
survey lists the primary concerns of small business owners.
Here are the top three . . .

  • Poor sales – 25%
  • Regulation – 19%
  • Taxes – 18%

People like
, point to the “poor sales” number as evidence that the economy
is hampered by a lack of consumer demand. They assert that increased spending
by politicians is needed to compensate for this, as proposed by the economic
theories of John Maynard
(pronounced Kines). But the following chart contradicts this theory (HT
: Mark Perry, Carpe Diem blog)

The actual numbers on consumer spending instantly refute the Keynesian economic proposals
favored by President Obama and Paul Krugman. There is no lack of “consumer demand.” Instead,
consumer spending is at an all-time high. Why then do so many small business owners list
“poor sales” as their chief concern?

Could it be because they need more sales in order to pay the increased burdens
imposed upon them by
The State?
After all, 19% of business owners identify regulation as their biggest problem, and 18% name
taxes. This means that a whopping 37% of the businesses surveyed cite one state-imposed cost
or another as their main difficulty.

A perception that the burden of The State is increasing could easily lead someone
to feel that sales are “poor,” even when consumer spending is at an all-time high.

Meanwhile, Professor Mark Perry has provided us with another chart showing us where the
economy’s real problem lies.
Spending by consumers and politicians booms, but private investment lags.

How can this be? Why aren’t investors rushing to take advantage of the surge in consumer
spending? Isn’t it possible that businesses are failing to expand and
hire because of UNCERTAINTY about the future costs of things
like Obamacare, the new Dodd-Frank financial regulations, and other statist
schemes that have either been passed or proposed? This suggestion certainly fits the available

It seems to me that left-statists are guilty of massive
special pleading.
They want us to be concerned about uncertainty, but only when it comes to consumers,
NOT when it comes to investors. They also want us to trust the policy descriptions
of John Maynard Keynes, but ONLY when it suits their desire to expand The State,
NOT when Keynes’s proposals would argue against what the politicians are doing.
Here’s what Keynes really advocated . . .

  • Politicians should accumulate surpluses during good times in order to fund stimulus
    spending during bad times
  • Stimulus spending should NOT be funded through borrowing, because doing that robs capital
    from private investment and is therefore self-defeating
  • Stimulus spending needs to be self-liquidating –
    it needs to pay for itself!
  • Investor confidence is just as important as consumer confidence

But all of this is the exact opposite of what the statists do in Keynes’s

Left and right statists in Congress have all favored deficits in good times, and the
left-statists in particular want to run even larger deficits during bad times. This is not
what Keynes proposed. The left-statists cherry-pick Keynes’s arguments to fit their needs.

The left-statists in Congress have also failed to focus their “stimulus spending” on projects
that will pay for themselves, preferring to use the money to bailout favored constituencies
instead, such as government employee unions. This is the exact opposite of what Keynes

But, worst of all, the left-statists continue to tell us that more statist spending is
needed to compensate for low consumer demand, even though consumer spending has completely
recovered. Is it too much to suggest that the people who do this, like Paul Krugman and
President Obama, are hypocrites and liars?

We think it’s time to start undoing this conspiracy of deceit, in which the
establishment news media is also heavily complicit. The media has failed to tell Americans about
the data and facts presented in this message, so we must step in to correct their error. Here’s
the truth . . .

  • Consumer spending has completely recovered
  • But private investment lags because of the uncertainty caused by statist policies
  • This means that the statists in Washington need to start doing

Please educate the public about the facts that demonstrate these claims . . .

  • Share this message with everyone you know
  • Ask your friends to share it with others too
  • And ask them to consider joining Downsize DC, by starting a free subscription to our
    email newsletter. They can do that here

When all the powers that be lie, it’s up to you to tell the truth, and spread it far
and wide.

Perry Willis
Vice President
Downsize DC Foundation

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