Archive for Keynes

Keynesian Ignorance

Posted in Uncategorized with tags , , , on May 1, 2009 by send it in

As a believer in free-market economics, I am often amazed that one of John Maynard Keynes most enduring lines is “in the long run, we’re all dead,” referencing the need for government interaction even though in the long run it may be destructive.

This logic applied to almost any day-to-day decision would be ridiculed and seem to come from an elementary student (literally, an elementary student – grades kindergarten through fifth).

– Why should a child brush his teeth?? Think of all that time he/she could spend watching cartoons which would produce much more utility.

– Why should a high school student finish high-school?? If he dropped out, lived at home, and saved his paychecks like crazy, he could accumulate perhaps $50,000 in savings during that time. Surely, it would take over a decade to even break even and who knows if he will live to thirty.

Maybe the best question would be why on earth would anyone pre-plan for one’s own death buy sorting out funeral arrangements, having life insurance, or even making a will.? After all, even in the case that one needs those things, one is already dead so who cares, right?

I read an article today from Veronique de Rugy at the Mercatus Center at George Mason University which deals with future effects from budget deficits. Her last sentence, in my opinion,  flattens Keynes with some simple logic about that ole’ long run.

John Maynard Keynes, the 20th century’s preeminent defender of deficit spending, famously quipped, “In the long run, we are all dead.” Keynes did not give much guidance, though, on how we would pay for the funeral.

Ya’ know, deficits, like all things, do have long-ranging consequences – yes , John, even after we’re dead.

Raise a glass to JMK, a great thinker, an Englishman, but unfortunately for him, also shown to be dead wrong.