The astonishing part about modern macroeconomics is how those whose wealth is most comprehensively plundered through public spending and crony capitalism are the ones who are told that everything is being done on their behalf. Governments spend trillions hiring their friends and colleagues through moneys syphoned off from a proportion of the taxpaying public, but the reality is that everyone who is not on the receiving end is on the paying end, whether one pays taxes or not.
An economy during any relatively short period of time – say over the course of a decade – has only so many goods and services along with only so much physical capital. Those who receive payments from the government, whether public servants or government contractors, get to spend well beyond any productive contributions they make to the economy. Everyone else ends up with less.
It’s how Keynesian economics works. A massive Ponzi scheme, where the poor and middle class are made to subsidise the relatively well off as well as the rich.
You think you are getting free this and free that. But the ones who are creaming off the system are the ones the government is paying on your behalf. Even if you don’t pay a cent in tax, you are paying an enormous cost in allowing others to get rich while you struggle to get by.
And if you think it’s bad now, wait till Modern Monetary Theory becomes the go-to means to finance governments. And we are just one election away from a full roll out in Australia.
That’s the title of the paper: Economic Theory ten years after the crisis, written by Droucopoulos Vassilis, Emeritus Professor of Industrial Economics in the Department of Economics at the University of Athens. There must be other such articles around, but this is one of the few I have come across. The abstract:
It is my intention to address, primarily within the scope of mainstream macroeconomic theory, three of the questions making up the main theme of the conference, namely: “How a very problematic theory continues to survive and dominate both the policy and the academic scene. What are the processes in the economy and the society that sustain its dominance? What is the condition of the economic Orthodoxy (particularly under its current form of the New Macroeconomic Consensus, that is the hybrid of mild neoliberalism with conservative New Keynesianism)?”. A good many orthodox economists hold the view that there is no necessity for a paradigm shift. On the contrary, a mere “evolution towards a more pluralistic discipline” would suffice. Hence the title of my talk.
They still don’t get it since variants of Keynesian economics remain as embedded as ever. But what a laugh to see New Keynesian economics described as “conservative”. It must be the modern fashion, and they wonder why nothing works.