More on Keynes

Although I don't expect to update this blog everyday, I saw an excellent article in today's Wall Street Journal by former House of Representatives majority leader Dick Armey that was directly relevant to yesterday's post. The article entitled Washington Could Use Less Keynes and More Hayek, addresses some of the major criticisms of government deficit spending in order to try and spur growth. Without repeating the article, I just want to emphasize his point that Keynesian theory ignores the self-interest incentives of the government employees that implement entitlement programs to use the funds in a way that best serves their own interests, rather than the interests of the public. There is no way that this money can be spent in a more efficient way than it would have been spent by the public themselves. Every individual knows how to best spend his own money so that it will maximize his own benefit, and we should allow individuals to distribute their own capital rather than inefficient government planning. Keynes followers refuse to allow the price system to distribute capital efficiently, which is the most fundamental building block of a free market system.