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The wall of lies – “cuts” that leave government spending HIGHER.

“Why do people not resist the endless increase of government spending? Can they not see it will lead to economic collapse? Are the people stupid? Insane? Just concentrating on internet porn? What?”

These are the sort of questions that free market people ask. But all the questions make an assumption – in fact several assumptions.

One unspoken assumption is that most people believe in “Keynesianism” – that they do not believe that increasing government spending is “good for the economy”.

Actually I think this assumption (that most ordinary people reject Keynesianism when they hear it) is actually valid. When people come home from a hard day at work and they see on the news (if they even watch the news) so obviously deluded person (such as the “Nobel” prize winners Krugman and Stiglitz) demanding more government spending on X, Y, Z, they know it is nonsense – at a gut level they reject this insanity known as “Keynesianism”. With its “monetary stimulus” and “fiscal stimulus” and other vodoo.

However, there are other assumptions which I do not think are valid.

For example, it assumes that most people know (know CLEARLY) that government spending is still increasing. And, in an American context, know that BARACK OBAMA has been the main driver in the increase in government spending in recent years.

The media reporting of this whole area is a TISSUE OF LIES.

The Economist magazine (“oh Paul not your favourate whipping post again” – it presents itself as a free market magazine, so of course I single it out) every week talks about the “cut” in government spending in Britain and United States and other countries.

Regarding the United States (week after week) it will write about the “hundred of billions” of reductions in government spending – whilst (in the real world) government spending continues to go UP. “Paul hardly anyone reads the Economist magazine”.

No – only people who are not satisfied with the ordinary media might do so. But what does the ordinary media teach?

The ordinary media teach that Mr Cameron and co have made savage cuts to government spending in Britain. That wise and noble Obama is struggleing for a “balanced approach” of “cuts” in government spending in the United States together with the “tax dodgeing” rich “paying their fair share”.

All of this is a tissue of lies (it is all false). But if people turn away from the general media to the specialist economic (and “free market”) media – they hear and see THE SAME THING.

In some corner of their minds most people have some doubts about what they are being told, but they are told it (including via the ENTERTAINMENT media – if they do not watch news or current affairs), government spending is being “cut” – Cameron and Osbourne are super “tough”, Obama is wise and noble struggleing against evil Republicans in Congress……

And on and on.

So the population (or most of them) are left confused – a WALL OF LIES keeps them from the truth.


  1. bloke in spain says:

    Public spending? Well yes. If you ask most taxpayers whether the government should spend more of their money, you tend to get a no. But that’s not the question that’s put. It’s always talked about in terms of investment. It’s entirely possible to get a political statement along the lines of “We will reduce government spending to enable investment in…” “Investing in services”, despite being an entire contradiction, is on the title page of half the local authority handouts in the country.

  2. Mr Ed says:

    It takes a peculiar type of political ‘genius’ to increase spending, and yet talk of ‘cuts’ as if real cuts were being made.

  3. Paul Marks says:

    Yes to both comments.

    As for the people – I am not saying that most people actually believe the stuff the media (and the politicians and academics and…) say, but they do not need to be convinced.

    For the farce to go on – the people just have to be CONFUSED (baffled – messed up), and remember most people have busy lives (“one vote is not going to alter anything”) and are not paying closer attention to any of this stuff.

    So the B.S. from the media (and so on) does its job – it leaves people confused and most people turn away from the whole discussion.

    The farce will go on – till the collapse….

  4. JohnM says:

    The problem with all the modern “Keynesianists” is that they extend Keynes’ ideas beyond what Keynes intended.
    Keynes advocated the use of monetary and fiscal measures to mitigate the effects of economic recessions and depressions, and not to prop-up a system suffering from endemic failure (such as ours), and certainly not to support a system that failed due to widespread financial incompetence and fraud.

  5. R Richard Schweitzer says:

    The place to begin is right here in the accurate use of language for the subject under discussion.

    The subject is not “***cuts***in spending.”

    The subject is “reductions in the increases in spending.”

    The results under consideration are the effects of reducing the ***rates of increases*** in spending.

    We have never been discussing reduction of spending. Government spending in both the US and UK has steadily increased, and will continue to increase, because “spending” through political actions is not tied to any determining source for that spending. Instead there has been unlimited resource to borrowing and increasing sovereign debt.

    Both nations continue to increase sovereign debt without limitation, even though the US has an imaginary mosquito net of debt ceiling, never really limited.

    To constrain spending, the authority for increases in sovereign debt should be tied to the sources for ultimate payment which, absent debasement and inflation, are the revenues that can be, and are, collected by extractions from the private sector.

    For a considerable period of time in the US the federal debt has increased at the rate of $60 for each $100 of collected revenues. Quick calculation will show that 37.5% (60/160) of all spending has come from increased debt. If the current rate of spending from increasing the debt is approximately 31%, then we are increasing the debt by $45 for each $100 of collected revenues. That is the principal source of increased spending, going beyond collected revenues.

    If it is necessary to continue increasing the debt at the present rate, or at any established rate, then the authority to issue additional debt should not rely upon some nonexistent “ceiling,” but should be measured by collected revenues which are established by the ability of the federal government (and congressional will) to extract funds from the private sector.

    A limit should be imposed upon any authority to increase the sovereign debt in any four fiscal months in excess of specific percentages of collected revenues measured as the greater of the average of 4 months collected revenues in the preceding fiscal year or in the immediately preceding 4 fiscal months, without application to, and approval by a super majority of legislative or parliamentary actions. Those specific percentages can be determined and adjusted for future fiscal periods in order to decrease progressively the rate of increase in sovereign debt.

    This will require constant attention of legislative doors. It may require legislation which adjusts appropriations and spending authorizations to conform to the limitations on increases in sovereign debt.

    There will be no end to the increasing spending so long as there is constantly increasing sovereign debt tied to know standard to measure that increase.

  6. Paul Marks says:

    John M. – the problem with Keynesianism was (and is) J.M. Keynes.

    He was wrong – not just wrong now, but wrong in the situation of 1936 (when the “General Theory….&