Keynes was wrong on politics

To the editor:

John Maynard Keynes was famous for saying, “In the long run, we are all dead.”  It is now 80 years since his General Theory and it is time to view Keynes in the long run.

Keynes was not foremost a politician, but an economic theorist, who assumed that the short-run remedy of the stimulus to economic downturns would be paid back by the growth it engendered.  He was theoretically correct, but in practical applications of the political process, has been proven wrong.  Wrong to the tune of $17 trillion in debt on the balance sheet of the U.S. government.

In the past 20 years much of the multiplier effect, which was the underpinning of his theory, has been sent to China in a gift-wrapped box tied with a ribbon. As it is only through domestic manufacture that the theory of the multiplier effect can pay back the debt incurred by Keynes’ “stimulus.” It is my view that within 25 years President Richard Nixon and Secretary of State Henry Kissinger will be vilified in this country for their opening to China, which essentially destroyed our domestic manufacturing capability.

The wealth of a nation is very much the sum of its people and what they produce. We have replaced our country’s production with a housing industry supported by mortgage financing, which by its very nature is poorly underwritten.  Interest rates are being excessively manipulated, supporting an irrational stock market.  The government has taken very necessary social welfare programs and expanded them to the height of absurdity.  All in an effort to do the impossible:  create an economy that produces nothing that is real, that is tangible.

Keynes was theoretically correct, but destroyed in the long run by the political process.

Howard Ring