"You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness. If we fail, at least let our children and our children's children say of us we justified our brief moment here. We did all that could be done."
Ronald Reagan

Wednesday, December 1, 2010

Dan Mitchell - New video debunks Keynesian consumer spending fallacy...and more

Here's a new video explaining why Keynesians are wrong.
Economic Growth Causes Consumer Spending, Not the Other Way.

It shows that consumer spending is a consequence of growth, not a cause of growth. Looking at the difference between gross domestic product and gross domestic income, the 5-minute mini-documentary exposes the flaw inherent in Keynesian stimulus schemes.

Also, the Chairmen of President Obama's Fiscal Commission have put together a report that purports to be a serious combination of spending cuts and tax increases.

Yet government spending, according to the Commission's numbers, would climb from about $3.5 trillion in 2010 to more than $5 trillion in 2020 - meaning government spending would increase about twice as fast as inflation.

This video explains that the budget can be balanced without tax increases through spending restraint:

And this video looks at the bigger issue, explaining that America's long-run fiscal problem is too much spending and that debt and deficits are merely symptoms of that underlying problem:

Dan J. Mitchell, Ph.D. is a Senior Fellow at the Cato Institute, Washington’s premier free-market think tank.
Visit his Website at: http://danieljmitchell.wordpress.com/

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