Wednesday, 20 November 2019

"Keynesian economics was once only about getting an economy out of a recession. Now it’s about massive and permanent deficits coupled with massive and permanent forms of public waste" #QotD


"There are economic idiots everywhere, but the biggest ones are the ones who think government infrastructure projects like this are good for the economy. Even the Premier is beginning to see what a black hole this is. Construction everywhere you turn in the City, whole city blocks turned into construction sites, billions of dollars being spent, and not a dollar’s worth of actual value-adding output anywhere to be seen. We are looking here at immense costs, for which there will NEVER be a single cent of profit ever earned...which means [these projects] will never ever repay [their] costs in the benefits [they] provide.
    "Keynesian economics was once only about getting an economy out of a recession. Now it’s about massive and permanent deficits coupled with massive and permanent forms of public waste...
    "Modern economic theory is a disaster for anyone whose government believes any and all of it. Public spending has its role, but is a drain on an economy’s productivity. Oddly because of the Keynesian nature of the National Accounts, all of this will show up as growth in GDP even though it is nothing of the kind. And there will be many people employed, except not employed on projects that will add to the economy’s net level of real production. They are not value adding. They may create a dollar’s worth of value, but for each dollar of value created it will cost much much more than a dollar. Why does this make sense to anyone?"

          ~ Steven Kates, from his post 'Ever wonder why real wages are falling?'
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