Keynesian wealth destruction

Posted by: Barthélemy Barbancourt

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One of the most odoriferous tenants of Keynesian economics is asinine idea that any government spending creates wealth. Here is a story that shows how poorly run government programs actually destroy wealth.

Shortly after taking office, President Barack Obama defended the weatherization portion of the stimulus bill in a February 2009 CBS interview, saying it would immediately put people back to work, reduce energy costs and lay the groundwork for future energy independence.

In total, the stimulus program allocated about $5 billion to the cause of home weatherization, outfitting homes with the latest green technology in order to reduce energy prices.

It’s now three years later, and it appears the weatherization program has gone down a road of waste, fraud and abuse.

Among his findings were that 14 out of 15 “weatherized” homes failed final inspection because of poor workmanship and 12 out of 15 homes contained substandard work that could have “resulted in significant property damage or injury to the homeowners.”

But Friedman’s report didn’t stop there.

In one weatherized home, 11 out of 14 items the weatherization contractor installed failed inspection. Another home had an improperly installed exhaust system that turned out to be a potential fire hazard.

The audit also found that the number of gas leaks discovered was “alarming.”

Worst still, Friedman reported that contractors hired to weatherize homes charged homeowners prices significantly higher than market value for the items they installed.

Much of the "work" will have to be re-done. The money spent for the faulty work was wasted and our tax dollars have been effectively destroyed. This is just one tiny example of how government destroys private sector wealth through wasteful and fraudulent government boondoggles.

This is why government must be drastically cut before any taxes are increased.

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TomC
...
written by TomC , September 21, 2011

I don't know how many times I and others have said it, but there is little government does well or efficiently because there is not incentive for it to do things well or efficiently. Therefore,government should be doing only those thing it alone can do.

Even if someone can name something the government does decently, it requires extorting, from someone who earned it, the money necessary to accomplish the deed. Wealth is never and cannot be created by government. So government can only consume or destroy wealth.

The left does not seem to understand this no matter how many times it is explained nor how many ways it is demonstrated.

And what the Fed continues to do, angers me to no end. They're keeping interest rates below the inflation rates is criminal. With inflation reported at 3-4%, but in reality twice that, and the Fed's interest rates at



jk noreen
A adjectival quandry...
written by jokin , September 21, 2011

Keynesian wealth destruction
Written by Barthélemy Barbancourt | 21 September 2011

"...poorly run government programs..."

I believe the redundancy factor on this phrase goes to "11". I couldn't decide if this statement was more redundant or oxymoronic, but actually government programs are proposed by demagogic morons who champion governmental intrustion into every aspect of human existence and lay off the actual work to be planned and executed by morons, so the "poorly run" can be assumed (redundant) and taken as irony (oxymoronic)- as every government program is pre-destined to fail, either by poor initial coneptualization and/or execution by unionized or civil service-protected worker implementation.


For example, is it just me, or is the governmental concept of INSURING Pre-Existing Conditions a redundant oxymoron devised by morons?




jk noreen
More pleonasmic thought...
written by jokin , September 21, 2011

"...poorly run government programs..."

On further thought, this has to be oxymoronic- can't name one government program that is ever "poor", remember Sen. Everett Dirksen who finally pointed out that Emperor had no clothes when he blithely, and ye oxymoronically pointed out: "A billion here and a billion there, pretty soon you're talking about REAL MONEY." This is all obviously true at face value, unless you ask a Lefty, who will convince you that instead of cutting these ridiculous, out-of-control boondoggles, why, just another Trillion or so "investment" $$$ and everything will be all right.




Barthélemy Barbancourt
Title registrations
written by Barthélemy Barbancourt , September 22, 2011

The state government does a pretty decent job of registering titles. It could be done better, but in the USA, 99% of the population has a clear title to the land they own.

If I thought for a long, long time I might be able to come up with something else that the government doesn't do that they really, really suck at. Of course, they are really, really good at wasting money.



TomC
...
written by TomC , September 22, 2011

And, It so happens, that title registration is one function that, reasonably,only government can do.

Most non-metro police agencies do a respectable job.



Jonny Texas
Can anyone.......
written by Jonny Texas , September 23, 2011

provide me an example where Keynesian economics was actually fully implimented?

I get the whole governmental borrowing and spending to increase demand bla, bla, bla.........

But has any government ever reduced the spending after the crisis and actually paid the debts incurred back?



Nobody
No Jonny
written by Nobody , September 23, 2011

To the extent that Keynes was a socialist, the USSR jumps out. Nah Gov'ts just colapse.



Barthélemy Barbancourt
Nope
written by Barthélemy Barbancourt , September 23, 2011

That is yet another reason why Keynesian economics don't work. Politicians and voters like tax cuts more then debt repayment. Once the crisis is over an entire chorus of people rise up and tell everyone that the debt is nothing to worry about.

This is why you can't have eggheads in the administration. They all love theory but they can't see how things fail in the real world.




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