Paying The Devil His Due: In The Red - Part I

“The wicked borrows and does not pay back, but the righteous is gracious and gives.” ~Psalm 37:21

"Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you. ~Proverbs 22:26-27

The rich rules over the poor, and the borrower is the slave of the lender. ~Proverbs 22:7

Owe no one anything, except to love each other, for the one who loves another has fulfilled the law. ~Romans 13:8

The thoughts of the diligent tend only to plenty; but the thoughts of everyone who is hasty only to poverty. ~Proverbs 21:5

Nowadays too many folks are poorly informed on what is going on in the economy. This causes fear and apprehension. Once you are done reading this post you will more than likely have even more of a reason to be anxiety ridden but it will not be because of lack of knowledge. I will not go into specific detail of every little nuance of this debacle called the economy but I will glean from the edges so that the reader has a comprehensive understanding of the current state of affairs nationally and globally. Please understand I support no political party in this and have no agenda other than to educate people about a broken system. What I am tired of is this: People being misled by the godless immoral monstrosity of transnationalism and economics being pushed to the forefront by a majority of those in power. I truly believe many are being controlled by fear of the unknown. How many times have we heard this in the last few years, “We have to dump billions or trillions into the economy or it will end in Armageddon!!!” The people in government saying this are no more wise than the average man on the street and are being used like by the academic elite and international power brokers in a massive form of social engineering that may or may not have its root in humanity. I believe no man could've orchestrated such a massive endeavour on the scale that we see today in the world. This seems otherworldy in its scope. So I present the information as I understand it. Enough is enough of the scare tactics used by pseudo-intellectuals and tools of Satan.
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The Roots of America's Faustian Bargain

The Great Depression that started in Fall of 1929 is often listed as having ended by the start-up of World War II due to the massive industrialization of America to put it on a war footing. If we look closely at the facts we will see that Roosevelt's Administration just extended the Depression through the thirties and probably postponed it for decades because of the economics of one very influential man that came to the attention of the Roosevelt administration. The US had been struggling to try and get out of the Great Depression for years and contrary to popular revisionist history the radical things that had been done during the New Deal and the years subsequent probably only contributed to prolonging the Great Depression not ending it.

Enter John Maynard Keynes. I will attempt to explain how the Great Depression and one man’s ideas: John Maynard Keynes' economic theory shaped the world of finance and created the crisis we now live in today in 2011. I will also show how the very fabric of the American (and majority of the Northern hemisphere including Europe) economy now have embedded directly within it the seeds of its own destruction. We are already seeing Europe’s economies imploding. I will do my best not to bore people. I will be giving a 30,000ft flyover from 1929 to 2011. People need to understand how making a government(s) God is its own punishment. How reprobate minds allowed to rule a nation are indeed their own downfall.

Keynes, through Roosevelt, became the economist most decisive in American economic thinking after the Great Depression and WWII and thereby gained in America the influence he already had on the European continent. To understand where I am going in this post we need to understand the economic theory Keynes promulgated. Once we understand this we will see how a British man that has been dead since 1946 still holds the USA and much of Europe in a cast iron death grip...and has the Chinese laughing all the way to the bank.

The concept of economics before Keynes was one akin to a roller coaster of extremes. Massive swings in the economy between inflation and depression were inevitable. It was believed that there were, built into the economy on a somewhat intermittent basis, the factors that could pull an economy upward from depression and ease it downward from an inflationary peak (inflation). The experts said that, during periods of depression, savings would rise and interest rates would fall, making money available for industrial expansion. It was automatically assumed that industry would invest the money and then expand. This in turn was suppose to increase employment and cause the economy to rise, thereby producing further investment. As we can see even in today’s environment this is a dubious assumption at best. Interest rates would supposedly then rise, reducing savings and causing a downturn in the economy. This is why we now see in 2011 that banks are charging people that are not spending or withdrawing money from their savings and only socking it away. The cycle it was assumed, would continue with dependable safety switches built in at the top and the bottom of the business cycle.

That was the view of the way the economic cycle worked according to conventional economists. Keynes, however, believed that there was a flaw in the view. The theory didn’t work during the Great Depression. The standard view did not guarantee the economy would go up again, stimulated simply by the businesses motivation. Keynes asserted that the missing element in the theory was at the bottom of the business cycle there would be no money in savings to reduce interest rates and the rebound from the bottom would never take place. In this situation Keynes said a stimulant or as we understand it today a stimulus was necessary to cause an economy to move upward toward prosperity from a recession/depression and that stimulus was not business investment (since business could not expand forever) but rather was elaborated upon in Keynes’ book The General Theory of Employment, Interest, and Money.

The Government As God

In a single sentence it will suffice to say that an economy always lives in the shadow of collapse. In another sentence it would suffice to say Keynes believed that there had to be another input brought to assure a smooth sailing economy. Something to assure the economy a kickstart to get it moving again. Keynes believed the New Deal sort of showed his point but he believed they did not spend nearly enough money to fix the problem of the Depression. Keynes believed that the government itself through social and fiscal legislation was the shot in the arm needed to get the economy moving again (i.e.: government investment, nanny state government, financial stimulus...socialism). Keynes believed that a government infusion of cash or cash rich schemes were the answer. He said it was the moral responsibility of government to create full employment (not business) even if it had to borrow the money. This philosophy is dangerously akin to socialism (Marxism) as to be indistinguishable from it. As a matter of fact it could be considered a form of Socialist Democracy or Democratic Socialism.

The borrowing aforementioned automatically assumed mounting debt because of the sheer enormous amounts of cash involved. If business would not invest, Keynes insisted it had to be government to avoid the inevitable collapse of the market(s). He had also recommended a similar course of action to other nations (Europe). In Keynes defense I will say that he probably did not intend this “solution” to avoid economic disaster to be permanent but that is exactly what it has become. It has become a permanent condition whereby government borrowing and deficit spending would become the expected and eventually the recommended course of action for the America and other nations. It is not surprising to see that because of the heavy-handed approach from government in Keynesain economics it is actually considered social liberalism or is a methodology of the social progressives that they hoped would lead to pure socialism.

In hindsight we see that the New Deal in the 1930s in America was a costly non-answer (and costly failure) to the problems of unemployment and poverty. The enormous expenditure of money by the government in the New Deal can now be shown as an unwise course that extend the Depression through the entire decade of the 1930’s. If WWII didn’t come along, history may have been quite different economically. Because of the war, the bill that need to be paid by Roosevelt’s spending got pushed off…into the future.

What we see in hindsight is the businesses did not trust the government in doing this and we see this even today. Companies have money to invest right now in 2011 but they are sitting on it because of the hostility by the government, their legislation and general public sentiment that has been stirred up by anti-corporate and anti-business rhetoric, much of it unfounded. Business questioned the role of government in the economy. This played directly into how government affected things like unions and questionable guarantees to financial institution through things like the FDIC. These concerns have been legitimated today now that governments faces billions of dollars of guarantees that are virtually unpayable to social reform programs such as Medicare and programs that still stem from the New Deal and things like LBJ's great society. The government has also incurred unbelievable debt from repeated market failures it never could've imagined.

Keynes philosophy gave birth to the recently coined “Nanny State” or "Government is the answer". Keynes proved government intervention would move the economy…he just never intended for it to be permanent. Keynesian economics fraudulently taught that government is the final end-all answer to financial woes. Government can do anything or whatever it wanted…government had become God. It was the idealization of the Marxist ideal of “The Party” in the utopian society. Today we know better...don’t we?

“Government can do all” was the concept behind Keynesian economics. After this “solution” was put into place it is reported that someone asked Keynes, “This appears to work in the short term, what about long-term consequences?"

Keynes's infamous answer was, "In the long term, we are all dead."

Lovely

[more in the next post...]