Economic Theories & Debt Driven Realities

Economic theory comes in many forms. The issue with them is that proponents espouse what they like while blasting the parts they do not. This might work in politics yet is very dangerous when dealing with economics.

Keysian Economics is a prime example. When unemployment is high and people reduce their spending, a recession will arise as production is cut. To offset this, government should increase its spending (read: deficit) to make up for the loss.

This is the policy of politicians both on the right and the left. What they ignore is the second part of the equation which says, after returning to normal, the government should go back into surplus.

Obviously this is not on the agenda for any politician.

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