John Maynard Keynes

That's a name you should get familiar with. He's the father of Keynsian Economics which is the theory that economic prosperity can be found by having the government borrow money, and then spend it through large public work projects and other forms of cash infusion. The recipients of this money will then spend it, thereby "priming the pump" and getting the economy flowing. His theory was the basis of the Great Depression era New Deal government growth and spending.

It's a nice sounding theory, but in practice it simply doesn't work. The main flaw is that, since the government can not make money on it's own, it has to raise taxes to take the money from the tax payers and filter it through the government bureaucracy, before then putting it back into the economy eventually back to the taxpayers. With all of this money in the hands of the government it is no longer available to invest in new growth of private enterprise, but is instead wasted on the government's overhead, pet projects and pork. The end result is economic stagnation, and increasingly massive government debt.

Keysianism failed to help the economy during the Great Depression and, in fact, helped make it "Great". More recently the theory was put to the test in Japan and resulted in a decade of economic stagnation from which the Japanese still have not recovered.

Right now, President-Elect Obama, Speaker Pelosi, and Senate Majority Leader Reed are all working on a new economic "stimulus" plan that is estimated to cost somewhere between $750,000,000,000 and $1,000,000,000,000. All of it is pure Keynsian growth and spending.

One of Obama's big plans is to throw billions of dollars into building roads, bridges, etc. He claims this will create jobs and such, but how? The jobs "created" by this plan will be filled by existing construction workers who are out of work due to a lack of private sector construction. Does he really expect that the thousands of MBAs laid off from the banking industry will go build bridges?

We're in for a wild ride... I wonder when the first breadlines will form.