It’s probable that Keynes was merely suggesting a temporary fix for an economy by instructing the investment in employment by the government.
His vision was not necessarily meant to be a permanent state of existence. He could not have foreseen a permanent existence of government borrowing and deficit spending which was being suggested for all nations.
The world could have seen the workings of the New Deal as a temporary and expensive fix for poverty and unemployment, as they would have then noticed, if it had not been for the up and coming disaster that we all now know as World War II. Government spending rose like a red tide to $103 billion annually. The day for paying the bills was put on the back burner until after the war. Unfortunately for us, that day never came, and each Presidential administration since FDR, except for a brief time under President Bill Clinton, has continued the Keynesian philosophy into our own time.
Keyne’s philosophy can be summed up as such: The Government has all the answers. Government guarantees stabilized banks. Protection satisfies labor unions. Regulation stabilizes transportation, travel, the media, housing, mortgages, pension funds, and retirement plans. Government is the final resource, it can create something out of nothing.
Keynesian economics writes a check for the next generation that it cannot cash. The ideas are effective in the short term, but mortgage the future.
“In the long term…”, said Keynes, “we are all dead.”
