The country needs to avoid Keynes' economic theories

To the editor:

In his recent editorial, "There is a reason economist Keynes is a survivor," Allan Powell heaps on accolades for a dead economist who should in fact be blamed for the financial mess we are facing today. Unfettered spending, easy credit and regressive tax policies are all hallmarks of Keynesian theory in action and are precisely the reason that America continues to wallow in recession, half a step removed from financial collapse.

At the heart of Keynes' theory lies the economic problem of a society that under consumes and saves too much (doesn't sound much like the America I know). These "unused savings" no longer circulate through our economy, so the dollars are literally no longer at work. As production slows and unemployment rises, people tend to spend less and save more, uncertain of what their future holds. This self-fulfilling downward spiral leads to recession, depression or worse. Keynes' solution then is for the government to ride to the rescue with massive spending that will create new demand, new jobs and increase consumer confidence, or so the theory goes.

Powell would have the casual reader believe that the government resurrects Keynes' general theory rarely, akin to breaking the glass in case of a real financial emergency. The notion that Washington only calls on Keynes occasionally to avert a financial collapse made me laugh out loud. Keynes' theory has continued to be the dominant economic model for the United States since the Roosevelt administration. When Nixon set the dollar afloat by closing the gold exchange window in 1971, he exclaimed "we are all Keynesians now," reflecting that our country was fully invested in this economic scheme for good or ill.

Today, our federal government fights trillion-dollar wars on borrowed funds, bails out auto companies that later go broke and props up banks that pay out million-dollar bonuses. It refuses, however, to lend credit to small business and injects new "stimulus" by allocating $787 billion in unaccounted funds to fictional congressional districts. As a nation, we should be asking "if we're broke yet?" Not in the world according to Keynes. Even though Medicare and Social Security are known to be unfunded mandates over the next 10 years, there is no meaningful discussion of how to properly fund these systems.

Keynesianism has no solution for our current problems and is just dead wrong. Much like an alcoholic who has been on a binge and wakes up feeling terrible, our country desperately needs to put its financial house in order. Keynes' answer to the hangover is to have a few more drinks when in fact the poison needs to be purged from the system. Over the past 100 years, the dollar has lost 96 percent of its purchasing power through the inflationary monetary policies of Keynes paired with the unstoppable printing press of the Federal Reserve. This has resulted in a $12,008,000,000,000 debt owed to foreign countries. We'd be much further ahead by burying Keynes once and for all, but the politicians by themselves will never kill the golden goose.

There are solutions. A sound monetary approach would demand that risky ventures, bad businesses and banks with overextended balance sheets to fail, wiping their bad investments from the books. Short-term pain would get us on the road to real recovery. Instead, the current policies of more spending will prolong the recession and unemployment, kicking the can down the road temporarily. The Ludwig von Mises Institute at www.mises.org clearly explains why government intervention and inflationary spending create moral hazard, mal-investment and unsustainable bubbles, but also offers free market solutions based on human action, the bedrock of economics.

In 1936, John Maynard Keynes closed his General Theory of Employment, Interest and Money with the following statement: "Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." How utterly prophetic.

Allen Twigg
Hagerstown

Health care reform should be for the benefit of the citizens

To the editor:

I just read the article, "Bartlett offers ideas on health care, energy." Am I supposed to feel confident in U.S. Rep. Roscoe Bartlett's vote? He claims that he did not read the bill "nor did anyone else."

"The bill was written in legalese." Really? All bills are written that way, I would challenge any citizen who is not a lawyer to read any bill and let them define its terms to the rest of us. This is why we elected you and every other Congress member and senator. How could any responsible member vote ... on a bill they did not read? You claim the bill is just another example of bigger government. How do you know, you didn't read the bill?

I am not a liberal or a conservative, and your actions are why I do not conform to the Republican or Democrat agendas. You people only care about your party's agenda, regardless if it is good for the American people or not. This is a like a game to elected officials trying to win one for the "team." The problem is that the team is your political party's agenda and not the citizens'.

You offered a health savings account where people would have money to spend as they wish, which would make them better, smarter consumers. Where does the money come from? Who insures the unemployed and homeless? Who insures the cancer patient or individual who came down with multiple sclerosis and is now deemed too expensive by their insurance company which drops them like a rock?

Please explain how your idea or the Republicans' agenda will do that? I am not necessarily in favor of what the Democrats want to do, but I have not heard how your ideas will answer the questions stated above.

Joe Milazzo
Smithsburg

U.S. Rep. Capito should have voted for health care reform

To the editor:

In her last chance to avert being cast into the dustbin of history, U.S. Rep. Shelley Moore Capito, R-W.Va., voted against health care reform.

The first chance for the 241,000 uninsured West Virginians to gain coverage has passed the House, but not with the support of their congressional representative. She chose instead to return the compliment granted her by big donations from the financial industry and the rich by voting their interests, not those of her constituents.

John Case
Harpers Ferry, W.Va.