Keynesian Economics, the Cancer in America

© 2012 John Shannon. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 6/05/2012

ISBN: 978-1-4772-1348-3 (e)

ISBN: 978-1-4772-1349-0 (sc)

Library of Congress Control Number: 2012909900

Printed in the United States of America

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Contents

Introduction

Authors Note

Dedication

Disclaimer

Prologue

Chapter I

What is Economics?

Chapter II

Keynesian Economics

Chapter III

How Is Keynesian Economics Destroying America?

Chapter IV

Other Economic Schools Of Thought

Chapter V

Curing the Keynesian Cancer and Restoring America

Chapter IV

Obama’s 100 Watergates, a KEYNESIAN effect

Chapter VII

The Flintstones and The Jetsons

Postscripts

About the author

Introduction

Keynesian Economics, the cancer in America tries to show the destructive force of Keynesian Economics. The book describes economics, Keynesian Economics, and other schools of economics thought. The book points out the fact that Keynesian Economics is basically all that is taught and used today in America. The book points out its destructive force and what it has done to the US economy and society as a whole. Keynesian Economics is like taking a slow acting poison. It doesn’t kill you right away, but it will in time and time is running out for America.

This book also shows the prosperity that America would be enjoying today without Keynesian Economics that has permeated the economic landscape since 1910, even before it was named after John Maynard Keynes in 1936. Keynes just picked up the ball, ran with it, and was lucky or in the future, unlucky enough to be named for this self-destructive economic force.

I do call it a force not an economic school of thought because when one really understands Keynesian Economics one also understands its destructive force.

Authors Note

Keynesian Economics, the Cancer in America is the fourth book I have written. The first book I wrote, The Federal Reserve Board, The Wizards of Oz, The Men Behind The Curtain was written because at the time of writing in 2004 Alan Greenspan was looked at by the financial community, the teaching community, and the government community as the greatest thing since French Toast. I believe Alan Greenspan and the Federal Reserve Board were great disasters for the American economy. I personally delivered the book to 80 of the 100 Senators and approximately 285 of the 435 Representatives in Washington DC in 2005.

I wrote my second book The Gold Star Investment Strategy to give friends, family, and others a sound economic strategy. Because of the incompetent investment advice that has been given over the years by financial planners, investment advisers, financial experts in the media, financial experts in the government, and financial experts in academia, I was compelled to publish my strategy. Most financial experts do not have a clue about economics. That book was written so the average person could invest properly without the need of incompetent, costly, and sometimes unscrupulous, so-called experts. Even though they have read a few economics textbooks, they do not understand economics. The proof is in the pudding. Why is America in such financial and economic crisis if the experts were experts; America and The world would be in prosperity not crisis.

I wrote my third book The Federal Government, More Wizards of Oz because of my frustration seeing this great country decaying, knowing the cause of the decay and watching the government speeding up the decay, under the guise of solving the problem and stopping the decay that they themselves are creating.

This book Keynesian Economics, The Cancer in America was written to show the tool that is being used to kill the founding American principles of freedom, liberty, equal opportunity, and prosperity, and spotlights the effects of that tool on America.

Dedication

I would like to dedicate this book to the Founding Fathers of this great nation in 1776. They formed a magnificent system with unlimited potential for opportunity and greatness for all its people.

I also dedicate this book to my father Leonard A. Shannon who possessed a great economic knowledge without ever reading an economic textbook. He truly possessed common sense economics.

Disclaimer

The author disclaims any liability for loss incurred as a result of information or advice given in this or any other of his books. This book is sold for information purposes only.

The author also disclaims any liability for loss incurred as a result of not buying gold or not heeding the warning listed in this book.

Prologue

It is April 2012 as this book is being completed. This year will be a crossroad in history. The election in November, the Supreme Court decision on ObamaCare in June, and I believe the riots that will start in May will mark this year, 2012, as either the start of an American empire dictatorship or a return to an American republic with renewed prosperity.

Are we going to take the same path as the Romans … from republic to empire, from rule-of-law to rule-of-Emperor, from the government fearing the people to the people fearing the government, from prosperity and values to poverty and social decay, and from freedom and liberty to control and rule? If President Obama is reelected and ObamaCare upheld, prepare for riots continuing into 2013, inflation, and poverty for the American people. America and the American people will be the deciding factor on the road not taken.

Chapter I

What is Economics?

Economics is the study of the production, distribution, consumption, and recycling (disposition) of goods and services. Humans have unlimited wants. There are scarce resources compared to the unlimited wants. If we lived in a world where everybody had everything they wanted, economics would be irrelevant. This is not the case. The world we live in has a finite amount of resources, which are: land and minerals, labor, capital, and entrepreneurial ability. Even abundant resources are scarce in relation to their needs and wants. Economics is what I call the Theory of Everything. Not to be confused with Stephen Hawking Theory of Everything. I call economics the Theory of Everything because it is totally what everybody does, every day, and all the time. Music can be listened to for an hour, baseball can be played for two hours, a movie can be watched for three hours, etc. etc., but economics cannot be avoided from the minute you wake until the time the Sandman visits your eyelids. Every day, humans try to satisfy the unlimited wants that they have.

Economics is the study of how scarce resources are allocated by people to people. Economics is the study of wealth. Economics is the study of how humans in their lives go about the business of life, earning and enjoying the fruits of their labor. Economics is the study of the activities with or without money that involve exchange transactions among people. Economics is the study of resource allocation. Economics is the study of man’s daily pursuits. There is no more important subject in the world to anyone that is not on their deathbed than economics.

Let me add all these things together and make one clear definition: Economics is the most important subject and study of the pursuit by humans of how humans and society end up choosing with or without money to allocate scarce productive resources which could have alternative uses, to produce various goods and services and how to distribute them for consumption now and in the future, among various people and groups in society and how these goods are recycled or disposed of.

In my early textbooks, economics was described as the study of production and consumption of scarce resources. Today the textbooks have added distribution to the definition. I have added disposal and recycling to that definition to make the sentence: Economics is the study of the production, distribution, consumption, and recycling of scarce resources.

Why do we study economics?

There are many reasons to study economics, and an understanding of economics is essential to be a well-informed voter. If a person has no knowledge of economics and a politician running for office promises to print money to solve poverty, to raise taxes to promote growth, and to implement rent control to lower rents, that person may get elected to office by an economically illiterate populace, as in the case of Sen. Kennedy. In a republic such as the United States of America, where every person has a vote, an economically intelligent people can promote prosperity with the correct choices at the ballot box, just as easy as an economically illiterate people can promote financial and economic chaos with the choices at the ballot box … as is the case today in America.

I consider America today mostly an economically ignorant nation, because I believe economics is so important. It should be taught every day and every year in school from first grade through college, along with math, science, English, history, etc.

Another reason to study economics is so the American people will realize the scarcity of resources and allocate, distribute, consume, and recycle resources in the best, most efficient manner possible.

Another reason to study economics is to gather economic information for the benefit of consumers, businesses, and government to understand how the economy is performing, enabling, through the free markets, those entities to make better decisions in the marketplace that will improve the efficiency of the economy.

Stated differently in a quote from John Maynard Keynes (The economist who blessed us with Keynesian Economics) The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood, indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

This statement by Keynes is probably the only statement I have agreed with him on. Although he was probably referring to Adam Smith’s The Wealth of Nations, I believe today he would be looking in the mirror and seeing himself instead of thinking he was looking at a picture of Adam Smith.

Let us return to Scarcity. Scarcity is the most important part of economics because resources are scarce, so we must economize. Do you want to go on a cruise or a camping trip for summer vacation? You may want the cruise, but may settle for the less expensive camping trip. Do you want a new Mustang convertible or used Hyundai? Is your evening out going to be spent at ‘One Hung Low’ Chinese restaurant or McDonald’s? Is the Home Depot Corp going to buy back company stock or by a new businesses? Is the Federal Government going to give Social Security recipients a yearly pay increase, or is Nancy Pelosi going to spend the money on Congressional junkets to exotic foreign countries?

We all make choices every day … consumers, businesses, and governments.

We constantly make very small to very large financial decisions every day because of the scarcity of resources. In fact most people are unaware that virtually all of their decisions throughout the day are economically based on scarcity of resources. The people with the least amount of concern for the economics of scarcity would be the English royal family and President Obama and most other members of the federal government.

Most economic textbooks deal with economic analysis and economic policy. In a free market economy, as the United States enjoyed for about 200 years, economic analysis made up the majority of economic thinking. Economic policy was a small