As I see it, the concept of using government spending to increase demand in the aggregate of markets takes for granted two assumptions that, though they should not be, are often overlooked:

1. The government has the money to spend in the first place. Since the federal government derives all power and funds from the people, Keynesian spending takes away from the very people (or at least the many responsible ones) we are trying to help. And to say borrowing from other nations is a viable solution to this dilemma is the other side of the same coin since the burden of repaying those debts will be placed on the American taxpayer anyway.

2. The government can effectively focus their Keynesian idiocy in the right markets as efficiently as private citizens and firms can. This assumption can never be fulfilled in reality, however, because before the government can spend money, it must first be consolidated in the form of revenue and then spent on huge magnitudes. Doing this contradicts the nature of individual actions conducted in the private sector, as many voluntary private transactions add up to build the economy, instead of spending from the top-down, and hoping some of the money goes where you want it to.


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