I disagree. There's certainly short term benefit to this Keynesian view, but long term it leads to wild volatility, partly because people are only one pay check away from ruin. When only the wealthy have a store of money to draw on in harder times (job or income source loss, broken appliances/vehicles/etc), it further harms the poor. It's a regressive policy because it disproportionately harms the poor. It forces people into leveraging credit each time a moderate to large expense comes up. That's not a fun way to live.
People misinterprete it to this basterdized version a lot though.
The real Keynsian model is that we should spend more in bad times and LESS in good times to even out business cycles.
People always forget that second part...
It was NEVER about spending for the sake of spending or wasting money on things that we don't need to help the "economy".
People misinterpret it to the point where they believe the economy is some infinite motion machine, where you ad more motion and even more motion comes out.
I agree with everything you said. Have you considered that the Keynesian model might be a failure since it does not account for human nature? I don't believe a government will ever reliably cut spending in good times and spend more in bad times. I am starting to sound like socialists saying "it's never been properly implemented!" Well, maybe the core idea works on paper but ignores human nature, maybe it simply can't be implemented properly.
Interesting, I'll definitely look into this further. If you have any links I'd appreciate it, but no worries if you don't have them handy (I can google).
