koan,
use your common sense. If I go mortgage my house to buy a Ferrari to impress my neighbors, will they think I'm a rich man? Yes, likely they will, but if I keep up that kind of lifestyle, then they will all wonder why I'm still working at 80 when all of them are retired.
Spending money is not wealth and it doesn't make for a wealthy economy in the long run. Savings and investment is what wealth is. Savings and investment is called capital formation, which is what allows for long term investments that grow the economy organically.
It is easy to print, borrow, and spend. But those are always very short term sugar highs that pull demand forward from the future and leave the future growth weaker as a result. If you planned to buy a care a year from now, but buy it today instead, because the government offered you a new low rate, does that mean you'll still buy another care a year from now? No. Your demand has been pulled forward and future car sales will be lower as a result.
You need to really think these things through. Keynesianism as practiced today, NOT as Keynes originally intended, is a bankrupt philosophy. Keynes encouraged smoothing out the business cycles by running surpluses in good times and drawing down surpluses in bad times. We have no surpluses to draw from, so we're printing and borrowing. Keynes would roll over in his grave if he knew this was how the Dems and Bernanke have perverted his theories. |
