Keynes, Government, The People and Obama

Posted by Monty Pelerin at 8:26 am Government, Keynesian, economy
Feb 072010

The results of this recent Rasmussen survey support my observation that the more economics courses taken in college the less knowledgeable a person is in the subject. Taken to its extreme, this contention would mean that those with PhD degrees in Economics are the least knowledgeable, which is not always true. There are actually some very fine PhDs in Economics. Unless one is closely associated with the profession in some manner or other, one does not typically hear from or about these people.

All the noise comes from government economists. By necessity, they are all Keynesians. In order to obtain a policy position in governmental economics, you must have a union card. Keynesianism is your union card. The damage Keynesians do in a classroom is itself unfortunate, but it is at least contained. Why do we allow them to ruin entire economies? If Keynesians are allowed to serve in government, they should be like Barney Fife — allowed to carry a gun but not a loaded one.

The Rasmussen poll also provides some bad political data for President Obama. Even amongst Dems, only 21% agree with the Keynesian approach and 47% do not. Overall, 70% of the American public say it would be better to cut the deficit. Once again, “the wisdom of crowds” seems to hold.

“These figures highlight a massive failure of leadership from both Republicans and Democrats among the nation’s political elite,” says Scott Rasmussen, president of Rasmussen Reports. “Given the amount of political chatter about the budget in recent years, it is almost beyond comprehension that neither party has seen fit to highlight the basics so that the American people can make reasoned choices on the fundamental issues before them.”

Friday, February 05, 2010
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However, all polling on federal spending and deficits must be viewed with the recognition that only 35% of voters realize that the majority of federal spending goes to just defense, Social Security and Medicare.

Richard Nixon once said, “We’re all Keynesians now.” But that was a long time ago, and it’s certainly not the case anymore (if it ever was).

While influential 20th Century economist John Maynard Keynes would say it’s best to increase deficit spending in tough economic times, only 11% of American adults agree and think the nation needs to increase its deficit spending at this time. A new Rasmussen Reports national telephone survey finds that 70% disagree and say it would be better to cut the deficit.

In fact, 59% think Keynes had it backwards and that increasing the deficit at this time would hurt the economy rather than help.

To help the economy, most Americans (56%) believe that cutting the deficit is the way to go.

Eighty-three percent (83%) of Americans, in fact, say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes.

(Want a free daily e-mail update? If it’s in the news, it’s in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

Rejection of Keynesian economics is found across demographic and partisan lines. Republicans and those not affiliated with either major party overwhelmingly reject the notion that increasing the deficit is the right prescription in difficult economic times. Among Democrats, 21% agree with the Keynesian approach, and 47% do not.

Investors reject deficit spending even more strongly than non-investors.

Of course, not all deficits are created equal. Forty-nine percent (49%) of the nation’s voters believe it’s more important to cut spending than to reduce the deficit. Polling released earlier this week shows a similar attitude as voters prefer lower taxes and deficits to higher taxes and a balanced budget.

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