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Keynesian economics.

Posted: 11/11/2012 10:42 AM

Keynesian economics. 


Hypothetical:  Let's assume the local sheriff goes into everyone's house in Nashville, and armed with a weapon forces everyone to head to the local bank and take out an loan worth 30% of their annual income.  The sheriff then directs each person to wal mart and forces them purchase a bunch of miscellaneous items they don't want or need with the borrowed proceeds.     Most of the items go in the basement or attic when they get home.  The sheriff also requires that the borrowers write checks to everyone at wal mart who is unemployed.

This spending is going to be great for the economy, right?

But what's wrong with this picture, and does this really differ from how keynesian economics is implemented?   Not really.

Last edited 11/11/2012 10:58 AM by doreking

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Posted: 11/12/2012 10:02 PM

Re: Keynesian economics. 


What multiplier should be applied to the foregoing spending?   I was thinking a multiple of 5.80.
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