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Audio version Pt. 2
President Barack Obama's stimulus bill has so far, done little to stimulate anything but debate about the efficacy of Keynesian economics.  The proponents of the "Stimulus Bill" argue that they are employing fundamental "Keynesian principles", while opponents of the bill are generally arguing that Keynesian priciples do not work.  While the opponents argument may be valid, it's irrelevant - because the "Stimulus Bill" is a perversion of Keynesian theory.

The history of civilization provides us with numerous examples of those who seek power, twisting the teachings of  a legitimate belief system into a tool to serve their own quest for power.  The teaching of Christ, for example, are steeped in peace, goodness, kindness, and even somewhat in  pasivism.  Yet there are countless examples where Christian principles have been the rationale for war, hangings, burnings, or lessor aggressions.  While many will argue that Islam has violent roots, few would argue that it directly teaches the mass murder of innocents - yet hardly a week passes without some demented individual blowing himself to bits in the hope of killing as many others has possible - in the name of Allah.

The current Administration is to Keynesian economics, what Osama Bin Laden is to Islam. or the Salem Witch Trials were to Christianity.

As an undergrad student of economics, this lowly future blogger spent many hours laboring over the writings and works of John Maynard Keynes .  His theory of a Government role in supplanting lagging demand in the private sector during a trough of a business cycle is a reasoned theory, which may be argued convincingly for and against, but it bears no resemblance to the current Administration's "Stimulus Package".   Keynes argued that during periods of economic downturn, productive capacity was abandoned to adjust to the diminished demand, and then later adjusted upward to meet increased demand as the business cycle rebounded.  Keynes saw these shifts in the productive capacity as grossly inefficient.  To eliminate such inefficiency, Keynes  argued that Government should step in, make up for the diminished demand, keep the productive capacity at a high level, then step back out as demand returned.  This is what many Keynesian's  teach as "priming the pump" of economic growth.

Such Keynesian theory is in stark contrast to the current "stimulus" theory.   Elkhart Indiana is where the President chose to shill for his stimulus policy, and it's a great example of the contrast between Keynesian economics and Obama's radical Keynesian Jihadist policies.

Elkhart Indiana is the center of RV manufacturing in the United States.  Demand for such vehicles has been devastated by a combination of economic events.  If Obama were practicing Keynesian economics, he would have taken the podium in Elkhart and announced that the Federal Government has just placed orders for several hundred RV's with various manufactures in Elkhart, and most of Elkharts citizens will be recalled to their old jobs soon.  He would have further announced that by the time all the orders were completed, there were very likely to be enough private sector orders to keep all employed for many years.  Were he to have done so, he doubtlessly would have been cheered mightily and been hailed by the residents of Elkhart as the Savior and Messiah in which they now so firmly believed.  This would be a true Keynesian policy.  While some would still argue against it on pure economic terms, the immediate impact would be significant and positive - at least in Elkhart Indiana.

Obama's policy however, like his answers during the "rally", were quite different,  The lord and merciful did not announce a government order for the productive sector of Elkhart to gear up and start cranking out RV's, rather he spoke of "providing" health care, unemployment assistance, food stamps, and school construction.  Not surprisingly, most of the people of  Elkhart were puzzled and responded with respectful yet limited applause.  In the current administrations perverse adaptation of Keynesian theory, the Government does not directly purchase from producers to supplant lagging demand, but rather it pours money into government sector, social services programs, which are designed to ease the pain of unemployment.  The rationale, in this Keynesian perversion, is that the money spent by those receiving government stipends will eventually increase lagging demand in the private sector.  One need do only a  superficial analysis of this logic to find it to be flawed at best.

There have been study after study showing the inefficiencies of government sponsered benefits.  Even the most optimistic studies concede that about half of the expense of programs such as food stamps and unemployment insurance are absorbed by administrative costs.  Yet the proponents of this Administrations Keynesian Jihad pontificate about something they call "the multiplier."  They then apply this "multiplier" to the program in question to justify the allocation.  Stimulus apologists cite multiplier factors as if they were the imperical equivalent of a proven mathematic axiom.  While in fact,, "multipliers" in an economic sense are an abstract and unprovable theory.  In truth, they probably exist, but not in this context.
 
The multiplier theory in economics is used to explain the differing impacts of various economic activities.  Hard manufacturing is generally thought to provide a high "multiplier."  That is, a dollar spent on manufacturing a tangible product, will be multiplied due to the necessary support industries required by manufacturing.  Service oriented work requires less outside support, therefore has a smaller "multiplier."  The exact  values of these multipliers are the subject of endless debate among people that debate such things, and there is only vague agreement among most about the relative order of  multipliers per type of economic activity.  Oddly, most place "banking deposits" among the highest of economic multipliers, but the administration has used the possibility that tax cuts might just be "saved" rather than "spent" as a reason to avoid tax cuts.

In short the Obama administration has perverted the fundamentals of Keynesian theory to include ALL GOVERNMENT SPENDING - with little concern about on what the money is being spent.  By this definition, money spent by government cannot be "wasted", it can only be spent and it will be returned to the economy in greater numbers due to economic "multipliers."   Even a child can see through this inexplicable logic.  If it were true, stimulation of the economy would be easy and risk free.  Simply announce that every checking account has an extra $1,000.00 in it tomorrow.  If that doesn't effectively stimulate the economy in a few months, just do it again - maybe using $10,000.00 next time.  Even if it doesn't adequately stimulate the economy - it will at least be returning at the "multiplier rate."  No harm done - right.

As stupid as the above proposal sounds, it is quite consistent with the Obama position on stimulus - which is ALL SPENDING IS STIMULUS.  Thus equating to a perversion of Keynesian theory equal to the perversion of Islam to support terroism, and using Christianity to support witch burning. 

In conclusion, remember, Obama' is  not a  Keynesian, but a  radical Keynesian Jihadist.