I am hoping this is going to be one of the few "original observations" or epiphanies about economics I came up with and hasn't been discovered by some long-ago economist or philosopher in the 1700's. I also hope Mr. Fuller doesn't come screaming in like an F-15 Eagle strike to deliver the bad news that, yes, indeed, somebody else has already realized what you did.
Keynesian economics, among other things, relies on what I like to call "black magic." We can try to articulate or summarize it, but in essence, I don't believe/criticize these "black magic" aspects of Keynesianism as such:
1. The government should have any kind of say or any care as to whether or not the economy grows or shrinks. It is not the government's business. The government should let people and companies rot if they fail, and they should not be in the business of anything, but merely protecting the people from foreign invaders, from criminals within, and beyond that, stay the hell out of their business. The arrogant assumption Ivy League brats can somehow "fine-tune" the economy is arguably the biggest failure of Keynesian economics.
2. Your obsession with "aggregate demand" is laughable. Especially given a discipline or variant of economics that only existed since the 1930's with Keynes. You have no empirical data it works. You just have John Maynard Keynes' book. It was theory. Not practice.
3. The belief just "moving things around" in the economy or "priming the pump" to ensure that all important aggregate demand curve up is.
There are more, but of all of them, #3 is the one I believe is key to the Keynesian economic philosophy and the one I think I have found an explanation as to why it is flawed.
If you believe in things like "multiplier effects," "aggregate demand curves," "government stimulus," and unicorns, it all make sense. Government merely spends more money, either borrowed or stolen from other people, it "mixes things up," and "POOF! Economic growth.
But the problem is what constitutes economic growth. That is PRODUCTION. Meaning something is produced and our standards of living increase because there is now more wealth for the population to consume.
Most Keynesian stimulus today is in the form of wealth transfers. And in being wealth transfers, that means there is no production.
I like to call this the "efficiency loss" of Keynesian economics.
ANYTIME there is a transaction of money, there usually is production on the other end. For example, if you were to give me $500, you would probably want something in return. THis requires I expend labor on my part and create something of value. Production. Economic growth. Wealth.
But with wealth transfers there is no compensatory production. It is just "Here, have money!" The welfare bum/parasite just takes it and then spends it.
It is here that a Keynesian or a socialist would trip over themselves to say, "MULTIPLIER EFFECT, MULTIPLIER EFFECT!!!'
But that is not the target of my criticism. My target is the transaction that just took place. That was an efficiency or potential production loss. The government could have spent that money and got something out of it (a plane, roads, etc.) Instead we wasted it. There was no production for that transaction. We had an opportunity to demand production and we did not take it. People slaved and worked hard to transform their labor into those dollar bills, and the government just POOF, wasted those people's labor.
It now becomes an issue of velocity (if you believe in that). Leftists, Keynesians would claim "so what, the efficiency loss of that one transaction won't matter as long as future transactions result in production. And since we're just trying to "prime the pump" it shouldn't matter in the long run.
My concern is what if 4 in 10 transactions are wealth transfers which would be a rough estimate based on government spending as a percent of GDP. We're wasting 4 transactions requiring no production on the other end.
In the end, it isn't to say our GDP isn't $15 trillion or whatever it is. This isn't even a broken window fallacy argument. IT's an issue of lost potential. It's analogous to a partially engaged clutch. If the clutch is only engaged say 60%, then only 60% of the gas you put into the engine via the throttle will translate into speed or movement. The clutch needs to be fully engaged to result in the maximum amount of efficiency and output. Merely transferring other people's wealth/time to the unproductive people destroys the potential that currency had to demand or call for future economic production. And you all wonder why blowing trillions on "stimulus" in this Keynesian nightmare isn't translating into genuine economic growth.
Oh well, not my concern. I'm just here, enjoying the decline.