But if there is one criticism I've yet to make of Keynesian economic
"Efficiency loss?" you might ask.
Yes, efficiency loss.
The whole underpinning argument of Keynesianism is that the government needs to intervene when "aggregate demand" is not meeting aggregate supply. And while Keynes advocated things that worked on the stimulus side (tax cuts), he also advocated boosting government spending with a magical "multiplier" effect. Take money from one person (ie - rich), give it to another person (ie - poor), and that poor person will spend that money which will boost aggregate demand, as well as set forth a chain reaction of demand-fueled spending with that multiplier effect all Keynesians swoon over.
The common response to this fallacy is that merely taking money from one individual and giving it to another does not increase aggregate demand. You stole money from one person who now has to spend less, which would negate any demand increase caused by this wealth transfer. Keynesians would argue that "well if we borrowed it, instead of taxed people, then everybody would spend more and this wouldn't happen!" Wrong again, because in borrowing that money, that is less money that can be lent out and invested, once again having no effect on overall demand.
But there is an often overlooked drawback to Keynesianism, specifically giving people money in the form of welfare, wealth transfers, etc., that nobody addresses. And that is the fact when you give somebody money for free, that is lost labor or production that should have happened.
For example for people like you and me and other real adults, if we want to get money we need to produce something of value to get it. This could be fixing cars, producing cell phones, or doing somebody's taxes. Whatever it is, it increases economic production, genuinely increases our standards of living, and results in a richer society. But with Keynesianism, especially of the Obama socialist variety, millions of people get trillions of dollars in exchange for absolutely jack. This "efficiency loss" is the true weakness or criticism of Keynesianism because you basically blew $1 trillion for nothing in exchange. This "cycle" or "rotation" of spending WITHOUT A COMMENSURATE LEVEL OF PRODUCTION OF GOODS AND SERVICES not only results in no economic growth, but dilutes the purchasing power of the currency.
Don't believe me?
OK, consider this.
Let's say everybody who collects a government check could not do so without first working on some kind of public works project at a pro-rated rate of the median wage to earn that check. Working on the highways, fixing street lights, cleaning up the road, etc. Do you have any idea how impeccably clean and mint our highway system would be? Or instead said welfare recipients were required to work at the local GM plant (it's government motors after all) doing whatever odd and non-specialized chores the mechanics and assemblers didn't want to do. Could you imagine how cheap GM cars would be?
The point is whether it was a public work or some kind of private company, society would benefit from requiring recipients of government checks to produce at least SOMETHING of value in exchange for the money. Today we literally piss away about $2 trillion a year and get nothing in exchange. Were there no such thing as welfare, production would be on the other side of that money, resulting in genuine economic growth, genuine economic production, and genuine prosperity.
Of course, I'm being foolish and naive criticizing this aspect of Keynesianism from an intellectually honest and economic standpoint. I know it is nothing more than bribing the parasitic classes to vote for the socialists. I know about half the population couldn't give two shits less about the future of the economy or the country. And I know that about half the population has no moral qualms about being the parasites they are.
I'm just making the economic argument against this aspect of Keynesian economics in the vain hopes the Keynesians would have a cup of STFU, and to show just how stupid Nancy Pelosi and Barack Obama are when they say government checks are the best thing for the economy.