CodePsychology on Nostr: If we think for a moment, that Keynesian economics try to solve a real problem, I ...

If we think for a moment, that Keynesian economics try to solve a real problem, I think the idea behind it is the following.

Market cycles are given. We have seasons, and you have different needs e.g. for different seasons. Also there are the natural catastrophes, that influences or creates new cycles. Also we could find many more reasons to have cycles. Even human life has cycles. So let's accept this for a moment, that with or without Keynesian economics, we have cycles and these creates economic cycles. Cycles of boom and bust.

The argument behind keynesian economics could be to ease these cycles. To decrease the severity of the storm with the price of decreasing the upside part. So to have less severe downturn in return for having less upturns.

I think this would be an argument for Keynesian economics from the FED or from whomever.

But the reality is the opposite. Somehow the possibility of printing money is not easing the downturns, but increasing artificially the upside, that leads to more severe downside. So seemingly it acts totally the opposite way then it intends to be used. In extra, it also increases the wealth gap.

So all in all, does it make sense to USE a tool, that could be used for good things, that is eventually happen to be used wrongly and cause bigger issues then there were?

$Boost